In conjunction with rising demands, peer-to-peer (P2P) lending platforms are experiencing soaring growth rates, as more and more SMEs are bypassing banks to gain access to funding.
Recent statistics from Companies House indicate that in 2014 a record breaking 581,173 new businesses were created, and that as of June 2015 a further 204,075 have been launched with the number climbing continually.
Where have these companies been getting their funds?
Well, at the same time as there has been a rise in the number of start-ups year-on-year, there has also been a proliferation in the number of new platforms offering alternative sources of finance for start-up entrepreneurs and SMEs who are increasingly choosing not to access funds via traditional routes.
One of the most successful segments in this alternative finance space has been P2P lending platforms, which have enjoyed a real explosion as a meaningful alternative to banks.
So far, as of June 28 2015, the cumulative total lent by P2P business lenders in the UK is £3,844,071,213, meaning that the sector is on track to lend £4.4 billion by the end of 2015, as has previously been forecast by Nesta.
(Image source: altfi.com)
A new survey from AltFiFunding puts this remarkable rise down to the fact that the sheer number of available alternative finance platforms has soared in accordance with the rising demands.
The survey finds that there are now 108 alternative finance providers available, with 56 platforms in the P2P business lending sector, and 42 platforms in the equity and reward crowdfunding space.
One of the most attractive offerings of alternative finance platforms is the quick turnaround that they can often provide. John Allan, the National Chairman for the FSB (Federation of Small Businesses), said: “In some instances, businesses can get access to finance within two days, which is much quicker than the banks. Getting access in that time can be the difference between grabbing a growth opportunity, and losing it.”