News that the Technology Strategy Board is offering £1 million in funding to UK motorsport technology companies illustrates how alternative finance has become a force in SME finance.

The announcement by the Technology Strategy Board is very well timed, and not just because it comes ahead of the 2013 Silverstone Formula 1 Grand Prix this weekend. Alternative finance has regularly grabbed the headlines in 2013 – the expansion of the Funding for Lending scheme and the success of the Start-Up Loan initiative, for example – but, for all the big announcements, recent figures from the Bank of England show that access to small business funding from traditional lenders remains limited.

So, the role of the alternative finance sector, whose growth has been led by invoice finance, has never been more important. While the Technology Strategy Board funding is directed principally at England’s Motorsport Valley and companies whose technology could be seen at Formula 1, Le Mans and Indy 500 racetracks around the world, invoice finance is available to a much broader range of companies across the industry spectrum.

At the heart of the Technology Strategy Board’s £1 million funding competition is the desire to keep UK businesses at the top of the leaderboard when it comes to motorsport technology, just as Button, Hamilton, di Resta and Chilton are aiming for British domination of the podium on Sunday.

Alternative finance is playing a similar role when it comes to providing start-up funding and maintaining cashflow for SMEs in the UK. As the government has repeatedly said, small business growth is key to general economic revitalisation, and services such as invoice finance are increasingly providing finance for these businesses.

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