A new Virgin Media Business study shows that a quarter of SMEs aren’t benefiting from the glow of economic recovery. So, what’s the answer? It’s something simple and flexible.

Naturally, the Virgin study points towards the role of simple and flexible digital technology in helping all small businesses grow, and while the company has a point, there is another simple and flexible service that is arguably more important: alternative finance.

Broader, more in-depth use of digital technology could lead to better performance by SMEs but for these companies to be in a position to action this strategy, they require greater financial security, in particular better cashflow. New figures from Albion Ventures and R3 show SMEs are still struggling with cashflow and late payment issues. Simple, flexible and transparent alternative finance services, such as invoice finance, peer-to-peer lending and crowdfunding, offer a solution to these ongoing problems.

The need for a secure financial platform on which to base business growth is advice that is continually and widely stressed, and the growth of the alternative finance sector illustrates how SMEs are increasingly reducing their reliance on traditional lenders to achieve this. A recent YouGov survey offers evidence of this change in attitude.

The SME sector is finding its feet again after some very difficult years and while this growth should be celebrated, it is clear that recovery remains a work in progress. If small businesses are to flourish, they need a sound financial base, and alternative finance has a key role to play.

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