UK businesses have turned to alternative finance in the decade since the recession, with invoice finance and peer-to-peer lending rising by more than £8bn, according to new research.
Asset Based Finance Association (ABFA) data shows a record high of £22.2bn of asset-based finance advanced to businesses at the end of 2016, up from £14.1bn in the beginning of 2007.
Over the same period, outstanding traditional business loans have fallen by eight per cent.
ABFA also found that during 2016, an average of £9.5bn was lent to SMEs using either invoice finance or asset-based lending products.
DTM Legal Partner, Kate Roberts, said: “Previously SMEs struggled to secure bank loans, due to a lack of solid resources to use as collateral, but now there is a wealth of options available, from crowdfunding to invoice trading.
“Being online businesses themselves, finance providers can relate to the value of businesses that exist remotely.”
Asset-based finance has been a lifeline for small businesses but it has now become a driver of growth for businesses of all shapes and sizes providing services beyond what traditional sources can often offer them.
DTM Legal have a wealth of experience acting for alternative finance companies in a range of areas including preparing new and amending existing documentation and loan agreements as well as representing funders in complex insolvency litigation.