Despite the mess surrounding Brexit, starting a business remains an ambition for more than a quarter of the people in the UK. However, a much smaller number actually achieve this goal. How can more entrepreneurial dreams become reality? Alternative finance has a role to play.

According to a new survey from Studio Graphene, almost 600,000 new companies were set up in the UK in 2017, an increase of nearly 25% compared with 2012. Furthermore, the research showed that 3.5 million startups were created over this period. Overall, a quarter of people indicated that they wanted to start their own business. The entrepreneurial spirit is clearly alive and well. This dynamism should be celebrated and encouraged.

However, the study also revealed that almost half of respondents were deterred from becoming business owners because they would not know how to fund their firms. Prolonged cautiousness from traditional lenders with regard to small business lending is undoubtedly a factor in this uncertainty. With a clearer picture of how to fund startups and the range of small business finance options available, perhaps more people would follow through on their ambition to start their own business.

This brings us to alternative finance and its place in the modern business finance world. The likes of invoice finance, asset finance, peer-to-peer lending and crowdfunding are now established business finance facilities because they offer small business owners an alternative means of accessing capital for all kinds of critical investment.

These small business finance facilities are helping people generate startup funding, raise funds for company growth, such as for new staff, equipment, training and properties, and grasp the opportunities presented by industry 4.0. They are also helping small businesses owners to navigate the uncertain waters of business rates reform, survive lamentable late payment practices, provide cybersecurity that fully protects their firms and their customers, adopt and develop the right sustainability strategy, and more.

It is clear that alternative finance is an essential tool for small business creation and development. And it is widely available from a range of non-bank and bank sources. For example, an automotive component supplier in Banbury has announced that it has secured a £20 million package, including asset finance and invoice finance products, from Santander Corporate & Commercial. The funding will allow it to target international markets.

However, it is important that business owners get advice when it comes to using these facilities, in particular in terms of being matched with the alternative finance service that suits them the best. This is how a Sussex small business used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the money to purchase new equipment.

With the British economy currently hamstrung by various factors, including Brexit, the role of the small business sector has never been so important in terms of maintaining forward momentum. Therefore, the creation of new businesses is vital. And alternative finance is critical to the future of entrepreneurial Britain.

Want to know more about what A&T Business Associates can do for your business? Contact Tony on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.