The rapid growth of the alternative finance market continues to gather pace. A new report commissioned by Fiserv – Future Trends In UK Banking – projects that UK P2P business lending, which stood at just over £1.2 billion in 2014, could be worth in excess of £12 billion a year by the end of the decade.
Despite the fact that there is currently a slight lack of awareness amongst SMEs about such alternative finance options available to them, as Business Wire reports, “this finding is expected to change as alternative finance providers flood the market to capitalize on growth.”
“Our research suggests that improved and user-friendly technology is impelling the growth of alternative finance in the U.K. We have seen the P2B and crowd-funding sectors engaging in a concerted marketing push, which is likely to raise awareness significantly. The buzz around alternative finance for SMEs is giving alternative financers legitimacy and encouraging SMEs to try these alternative funding options.”
Indeed, the key players in the alternative finance sector have a responsibility to raise their respective profiles, as well as awareness amongst SMEs and indeed the general public. Investing pensions and other savings in SIPPs (self-invested personal pensions) and further AltFi initiatives has the potential to reward savers with much higher returns, whilst simultaneously boosting the economy by creating a massive pool of funds that would be available for SMEs.
“If only half of UK households lent just a tenth of their savings through P2B, this could potentially give a total pool of available lending of £11 billion,” says Business Wire.
Spreading an understanding of alternative finance is the ultimate goal of the industry, and The Route – Finance has put together a free Alternative Finance Guide as a full reference document to help steer you through the numerous AltFi vendors that are successfully operating today. Download the free guide here.