Why are Businesses Using More Alternative Finance Options?

canstockphoto20444652In the last couple of years there has been an increase in the number of businesses seeking out alternative financing options. This has been to both create a new start-up or for financial help to help get through a tricky period, whether that is by expansion or simply having enough money to keep operating.

It used to be that any company in need of a loan would pay a visit to their bank, but that was before the global financial crash. There are now many more choices available and a number of reasons why alternative finance options are on the rise.

The Current Economic Climate

Ever since the global financial crash of 2008, alternative financing methods have experienced a sharp surge in clients. While the economic climate has improved since then, many banks have been a lot warier about lending to businesses, tightening their policies.

This has resulted in a lot of small companies seeking financial help elsewhere, such as through invoice financing with Market Invoice or borrowing from independent financial companies. Even as the economy continues to improve, a lot of SMEs are still relying on alternative finance options in some part for the smooth running of their company.


The Brexit result has thrown up a lot of uncertainty into the current UK economy. Even though the process of the UK leaving the EU has only just begun, already some of its effects are being felt by many companies based in the country, while others are preparing for its impending impact.

Alternative financing options are required to help many cope with the financial loss they may experience in preparation for and after Brexit. It could be through losing staff, clients, funding, trade and other areas that will be hit by the changes it brings about.

Increased Flexibility

There are many alternative financing options that provide a more flexible use for businesses, rather than straight borrowing. Some others can also be used for specific purposes, such as covering for invoices if your business is suffering from a particular financial problem.

The wider choice available in financing methods for businesses has helped many move away from the standard bank borrowing loans. With the chance to use more flexible finance options and tailor solutions to fit your precise situation, it’s little wonder they are proving more and more popular with businesses instead of using banks.

Expanding Markets

As businesses deal with the changing economy, more and more opportunities are opening up in the ever-expanding markets. A consequence of this has been that more businesses have used financing services to get their new ideas into action, whether forming a brand new company to do this or growing their existing one.

The wider market has also increased the challenges, especially as the whole world becomes closer. Increased trade has meant companies need to diversify and jump on fresh opportunities when they can. On the whole, alternative financial options have been a positive thing for many different types of businesses.