Online alternative funding market set to hit £1bn transactions by end of August
£852m lent to small and medium businesses with 168% growth since September 2013, study finds
The alternative online business funding market will “crash through” the £1bn mark of investments into small and medium-sized companies this month, a prediction made in a new report published today by finance start-up Fleximize.
The study, which surveyed 541 UK start-ups, found that the amount provided to small and medium enterprises by alternative funders had grown by 168% from September 2013, rising from £318m to £852.5m in June 2014.
The report suggested that the funding amount of small and medium firms in this sector had increased since September by a monthly average of 11.7% with £2.2m new funding every day.
It is estimated that this trend for online alternative finance will continue to “see huge growth” after 59% of companies surveyed said they expect business growth this year with 24% stating that a demand for business credit will see them consider alternative lenders over the next three years.
The research builds on recent stats which found that the UK’s alternative finance sector exceeded more than £1bn transactions for 2013.
Fleximize founder and managing partner, Max Chmyshuk, discussed the findings:
“Reaching the £1bn lending benchmark is a huge milestone for alternative lenders in the small and medium enterprise sector. As the industry works more closely with government and banks, alternative finance will become better recognised, allowing us to reach £2bn and beyond very quickly.
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“We are hopeful that legislation encouraging banks to work with alternative finance institutions will be introduced.”