According to a new study, poor management skills are hampering the growth of the SME sector. Managing alternative finance is one skill that SME owners need to master.

A survey of 2,500 SMEs by Warwick Business School concluded that shortcomings in terms of management skills, such as formalised strategic management and human resource management, are proving a barrier to growth for SMEs. While the School is likely to have its own agenda here, the survey does highlight the fact that modern business owners need a range of high-performance management skills. One of these is business finance management and, in today’s environment, this has to include alternative finance strategy.

The rise of alternative finance has been prolific and is set to continue in the short term at the very least. According to information from the recent alternative finance-focused Lendit conference, the small business loans market share of alternative finance companies could increase to 75% within 10 years. At present, the level is below 5%. With the SME finance market undergoing such a sea change, it is imperative that business owners are aware of the alternative finance opportunities that exist for their companies.

One thing is for certain, traditional lenders know which way the wind is blowing. Following HSBC’s announcement of a multi-billion pound national SME fund, Lloyds has unveiled plans to invest £1.2 billion in medium-sized businesses in the UK over the next three years. On the face of it, these are two welcome pieces of news for SMEs, but has the horse already bolted for these lenders?

What is clear is that the alternative finance sector, led by the likes of invoice finance, peer-to-peer lending and crowdsourcing, is here to stay.

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