The last few months have been an extraordinary time for the world of alternative business funding in the UK.
Until recently considered a backwater of mainstream finance, without heft and much misunderstood, alternative funders are now beginning to reap the reward of years of swimming against the tide.
We live in a world where momentum is everything. I recently attended an event discussing the prospects for the alternative funding sector with Dr Vince Cable, and it was during this conversation that I realised that momentum appears to be on our side.
That is not to say that everything is plain sailing from here on in. Far from it. We have experienced false dawns before. But something is different this time.
The time is right.
We have come to an important tipping point. The status quo is no longer acceptable and there is an alternative. Business owners require choices and once they realise what choices are available they will demand access to them.
I have blogged before that what we were building was nothing short of disruptive to the world of business finance. Do not doubt that what we propose will provide this disruption. When people have choices they exercise those choices.
But this shouldn’t be seen as a negative, even by the very biggest lenders in the marketplace. Their strengths will continue to serve them well. With their sophisticated risk modeling, highly trained staff and sometimes many hundreds of years of experience and credibility, they remain and will remain the dominant force in business finance for the foreseeable future.
And yet they have weaknesses. So often they are forced to reject loan applications; unable to share the risk, they find themselves with no secondary or tertiary position. Yes or no. The disappointed borrower and unfulfilled lender.
As the alternative business funding marketplace develops and matures, able to assess risk differently, able to utilise assets that banks aren’t able to, lenders of all types will come to understand that transparent collaboration in this field is the real disruption.