Political party-sponsored letter writing – that’s the big business news right now. But SMEs would be better off putting their support behind alternative finance.

Who’s going to form the next government after the 2015 general election? As long as the new occupants of No.10 back alternative finance (and given the current climate, it seems certain that we won’t witness any dramatic changes in alternative-finance-focused policy) SMEs shouldn’t pin their flags to one particular party.

Recent SME sector news has been dominated by the revelation that the letter of support for the Conservative Party from 5,000 small businesses published in the Telegraph was organised at Conservative Campaign Headquarters. A shock? Far from it – it’s not an uncommon strategy and the Liberal and Labour parties have done similar in the FT and Guardian. Indeed, given the practice, energy would be better spent on supporting a sector that has stepped in to plug the gap left by cautious traditional lenders and is offering SMEs a lifeline in terms of raising start-up funding and capital to maintain cashflow.

News that a new Challenger Bank, Cambridge & Counties Bank, has reported a 126% rise in SME loans in 2014 underlines the role alternative finance is playing in revitalising the SME sector in the UK. These figures come shortly after it was reported that asset-based finance, led by invoice finance, continues to break records in terms of use by SMEs.

While SMEs need to be wise about their choice of provider, it is clear that the alternative finance sector is leading the polls when it comes to small business finance.

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