The credit card is having a mid-life crisis. In the world of personal finance, consumers are turning their backs on the high-street credit cards in their wallets and purses in favour of alternative finance products. Sound familiar? For small businesses using SME finance services, it certainly will.

News this week from PricewaterhouseCoopers (PwC) that the popularity of high-street credit cards is faltering, nearly five decades since their introduction, as consumers switch to alternative personal finance products, such as pay-day loans, is unlikely to have come as much of a surprise to small business owners in the UK, who have steadily reduced their reliance on high-street bank SME finance services in recent years, turning to alternative SME credit facilities such as invoice finance and asset finance.

According to PwC, card borrowing declined in 2011, with nearly one million cards discarded during the year. There are comparisons here that can be drawn with trends in SME finance provision. As these figures from the Asset Based Finance Association show, small businesses are increasingly turning to invoice discounting and factoring instead of loans and overdrafts from high-street SME finance providers.

PwC predicts that the use of alternative finance services will continue to rise and that these service providers may expand their products and encroach further into mainstream finance territory. The same can be said of small business finance, although the boundaries are perhaps more rigid here, making it a matter of companies using the likes of invoice finance and asset finance alongside, rather than instead of, mainstream SME lending services.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.