Business leaders call for more to be done to educate businesses about alternative finance
Liverpool business leaders are calling for action to stop fledgling SMEs turning to credit cards for lending and consider alternative sources of finance.
Recent statistics by Legal & General show there is a rise in the number of SMEs borrowing through unsecure routes such as credit cards after being turned down by banks. Only 3% of SMEs relied on credit cards in 2009, but that figure had increased significantly to 23% by 2014.
In light of this, Professional Liverpool’s Corporate Finance group is promoting a series of ‘Access to Alternative Finance Briefings’ to give advisers to North West businesses the opportunity to learn more about alternative forms of finance out there.
Steve Stuart, board member for Professional Liverpool, said: “It’s shocking to see such a high percentage of SMEs turning to credit cards as a form of finance. Worryingly, this figure could rise even more if we don’t take action now and give businesses the full picture of the many forms of alternative forms of finance.”
The alternative finance industry was reported to be worth more than £3.2bn last year according to the Pushing Boundaries report by Nesta. However, despite the growth of the industry it has been widely reported that 56 per cent of micro, small and medium-sized enterprises remain in the dark about non-traditional funding methods available.
More than 80 business professionals from across the Liverpool City Region gathered at the first briefing to hear from high profile industry speakers spanning major banks, fund managers and crowd-funding companies from across the UK as well as regional funding programmes.
The speakers included: Tim Rigg, a former director of three major banks, Gary Davison partner at Tosca Debt Capital, Peter Garnham, director at British Business Bank Investment Ltd, Francesca O’Brien, head associate at SyndicateRoom, Dan Saunders, managing director at Foresight Group, Paul Humphray, investment director at MSIF Ltd and Geoff Bates, programme manager for the Regional Growth Fund at St Helens Chamber.
The alternative finance options discussed included equity crowd funding, pay-as-you-use equity financing for business solutions, the role of the British Business Bank and Angel Co Funding, details of new debt funding as well as grant funding.
Following the success of the launch event, Professional Liverpool’s Corporate Finance group have set up a series of future events on the same topic. Upcoming events are scheduled for 7th December, 1st March 2017 and 7th June 2017.