Business does not exist in a vacuum. The Investment Observer looks at small and medium-sized businesses' (SMEs) need for funding capital, and examines this need in a UK political context. It seems that, as the bank funding climate turns harsh, UK SMEs are turning to alternative sources as Brexit makes itself felt.
"UK businesses are turning to alternative finance to seek funding for expansion, as credit conditions tighten in the face of Brexit uncertainty.
"With the UK in the early stages of Brexit and now facing a General Election, new research conducted by RateSetter Business Finance found that 32 percent of SMEs that had considered raising finance said that it was now harder than six months ago.
"With banks closing their branches and cutting back on front-line staff in order to save money in the face of a difficult economic climate, businesses are increasingly looking elsewhere to benefit from face-to-face contact before borrowing money. The survey found that over a third of small businesses preferred to seek advice in person, with banks' move to online-only offerings and the closure of physical branches proving off-putting.
"Peer-to-peer lending services are becoming the go-to choice for many small businesses seeking finance. Platforms such as RateSetter Business Finance, who facilitate loans between investors and UK small businesses and individuals at interest rates set in an open market, are proving increasingly popular."
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