The changing landscape of business finance and lending continues with small and medium sized businesses being encouraged to look beyond the main high street banks for lending and sources of funds for growth.
As the main high street banks retreat from lending to small and medium sized businesses the CBI have published a report encouraging a revolution in business finance. Encouraging the growth of the corporate bonds market, invoice or other factoring and crowdfunding.Crowdfunding can take the form of peer to peer lending by firms such as Funding Circle or direct equity investment through websites such as Crowdcube or Seedrs.
The role of crowdfunding is increasing and its growing reputation has now been recognised by the CBI and Business Secretary Vince Cable.
"Britain's businesses cannot grow, export and innovate without proper access to bank credit. But they also need alternatives when looking for finance," said Mr Cable. "The government wants to see a shift in the market structure towards non-bank lending."
The challenge is now for Mr Cable to work with the UK Crowdfunding Association and the Financial Conduct Authority (FCA) to develop a regulatory framework in order to give new crowdfunding businesses an opportunity to enter the market. There is also the need to provide confidence to existing businesses to obtain capital via crowdfunding and for investors to invest via crowdfunding.