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Alternative Finance blog


Ten useful numbers businesses and investors should know about alternative finance in the UK

Ten useful numbers businesses and investors should know about alternative finance in the UK

4 months ago


Ten useful numbers businesses and investors should know about alternative finance in the UK

 

6% is the percentage of all seed and venture stage equity investment provided by equity crowdfunding in the UK(that’s the money used to start up business growth).*

12% is the percentage of all money lent to small UK businesses through alternative finance in 2015. This may not sound like a lot but remember alternative finance was only ‘born’ in 2011 in the UK. *

295% is the year-on-year growth of equity based crowd funding in 2015. That means that the £332 million that was invested via equity based crowdfunding in 2015 was substantially more than then £84m invested in 2014 and that this sector is growing fast.*

45% is the percentage of alternative finance platforms reporting some level of institutional investor involvement in 2015. Which means that the ‘professional’ investors are dipping their toes into alternative finance as a means of increasing the value of their capital. *

1 in 5 is the number of businesses that fail after raising money through crowdfunding and so lose its investors’ money - according to AltFi Data research for 2011 to 2013. Which is why the Financial Conduct Authority (FCA), considers crowdfunding investment high risk and why Businessagent.com recommends that you should not invest money that you cannot afford to lose.

20% is the amount of tax that an individual would have to pay from income generated from a peer-to-peer lending investment. Unless of course that money was invested via an ISA, in which case there is no tax on income generated.** Which is why a tax wrapper like an ISA makes sense.

0% is the amount of tax that you have to pay on an equity crowdfund investment if you invest via an Enterprise Investment Scheme (EIS) or SEIS (Seed Enterprise Investment Scheme). Which is why it is worth learning more about tax wrappers like EIS and SEIS before crowdfund investment.

7% is the average acceptance of loan applications by peer-to-peer business lending platforms (based on transaction volumes between 2013 and 2015 and excluding real estate loans). At Businessagent.com we believe that most businesses seeking debt through a peer-to-peer lending platform do so because a Bank has turned them down. Which means that many businesses really have found an alternative finance route thanks to crowd debt funding.*

£76,280 was the average loan size for non-real estate business loans through peer-to-peer platforms in 2015 in the UK. These loans were funded by an average of 347 lenders.*

£523,978 is the average deal size for non-real estate businesses via equity crowdfunding platforms in the UK in 2015. This is an increase of 38% on the 2014 average of £199,095 and shows how equity crowdfunding in the UK is maturing (taking on larger deals).*

 

*source NESTA Pushing boundaries: the 2015 UK alternative finance industry report

**source HMRC



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