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Alternative Finance blog


Personal relationships matter

Personal relationships matter

3 months ago


Personal relationships matter. No matter the advances in technology, including artificial intelligence (AI), this remains clear. businessagent.com offers investors and businesses sight of the UK’s Peer-to-Peer (P2P) and UK Equity Crowdfunding markets in one place, but it also has a dedicated team who spend time getting to know and helping small businesses seeking loans or help in their search for capital investments.

The SME Finance Monitor (a regular survey of 5,000 small to medium sized businesses in the UK) shows that more than two thirds of all business loan requests are for less than £25,000. These smaller loans are of less interest to brokers, who seek the higher remuneration that commission from larger loan deals offer for the time that they put in brokering deals, and despite the opportunities for alternative lending that P2P platforms offer loans continue to be largely sought from and facilitated by the Banks.

But the Banks have periods where they cut lending or seek to change the dynamics of their loan books. During such periods it can be harder for SMEs to source loans and when that happens will the P2P platforms be there to take on a larger percentage of the SME lending market?

Certainly they are positioning themselves to do so and with the aid of tax breaks like IFISAs and attractive estimated annual interest rates relative to more traditional income sources like cash, equity income and bond investments, investors are paying more attention to P2P lending, providing lenders with the capital needed to make loans. It will therefore be interesting to see what impact the new rules from the Regulator, the Financial Conduct Authority (FCA), have when released (expected in September). Will they provide investors and advisors with the confidence that they need to commit further to the platforms? Or will it damage a growing, but still fledgling sector?

At businessagent.com we think the former and see more stringent controls and the confidence that they will bring, along with improvements in the information from platforms as a positive step.

Tagged: alternative finance peer to peer p2p SME technology artificial intelligence investors businesses banks IFISA




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