How to fund your business without using the bank
Alternative finance enabling business growth
When it comes to accessing finance, business owners are accustomed to hearing 'no' from the bank.
In fact, according to the Australian Bureau of Statistics (ABS), small business loan applications are rejected at roughly twice the rate of medium-sized businesses. Alternative lenders are the most likely to extend credit to small businesses, as they focus on real-time business data to better understand the creditworthiness of small business borrowers
HARVARD BUSINESS SCHOOL
NSW BUSINESS CHAMBER
NSW BUSINESS CHAMBER
This is a significant concern given the contribution small business makes...
Despite the undeniable contribution small business makes to our economy, for traditional financial institutions, small business is not BIG business
IT'S EASY TO SEE WHY...
When an SME needs finance, they’re not asking for hundreds of thousands of dollars. Compared to an enterprise, these businesses ask for relatively small amounts of finance, commonly to manage working capital and cash flow or to purchase inventory
The banks often can’t justify the cost of processing smaller credit applications and SMEs are turned away. Banks typically demand five years’ worth of business data plus another few years of business forecasts before providing a loan. Many SMEs are not in the position to share that kind of data but are in a good position to grow
The banks often can’t justify the cost of processing smaller credit applications and SMEs are turned away
Banks typically demand five years' worth of business data to analyse plus another few years of business forecasts before they will provide a loan. Many small businesses are not in the position to supply that kind of data but they are in a good position to grow
Alternative finance has found a way to make small business BIG business
By utilising cutting-edge technology to keep overheads to a minimum, enabling them to offer a viable alternative to customers
JENS WOLOSZCZAK, FOUNDER AND CEO OF SPOTCAP
“Globally alternative finance is revolutionising the way SMEs access finance and driving the community toward achieving business goals”
According to a report by KPMG and the Cambridge Centre for Alternative Finance, the total volume of business finance reached almost $685.6 million in 2015 in the the Asia-Pacific region (excluding China), growing 259 percent from 2013
Alternative finance is thought to have the potential to become a $95 billion a year industry in Australia alone by 2019, according to the same report
By overlooking small business and deeming it too costly and/or risky, traditional providers have created a gap in the market big enough for a whole range of alternative finance providers to fill. These providers are motivated by a desire to cater to a section of the financial market that is currently underserved by banks
In particular, the business borrowing system was broken. A better system, one designed to support SMEs, has emerged
Managing Director Spotcap Australia and New Zealand
“Small businesses are the lifeblood of the Australian economy and fast and simple access to finance will empower them to thrive and seize growth opportunities.”
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