SMEs vital for growth of UK economy, shows research
SMEs are vital for the growth of the UK economy, according to Alex Hazell of the SME-focused bank Aldermore. Hazell discussed the topic of SMEs seeking funding in a blog post, stating that they face a “plethora of challenges” when it comes to funding business growth.
Despite this, figures from the Federation of Small Businesses show that 99% of the estimated 5.4 businesses in the UK private sector are SMEs.
According to Hazell, only certain types of funding are suitable for certain types of businesses. Whilst there may be lots of options for funding, the cost and service may not always be the most effective. Hazell discussed the option of invoice funding, stating that those who select this type of funding are “more likely to get direct access to decision makers.”
“This means decisions tend to be made more quickly and based on professional relationships, rather than simply just facts and figures. Time is often of the essence when securing funding, and the beauty of invoice financing is that it combines a commercial attitude with an uncomplicated underwriting process,” he said.
Hazell went on to discuss the benefits of invoice funding for SMEs, stating that it provides flexibility and is “less prescriptive” than traditional methods of funding. He added that it can be tailored, providing businesses with bespoke solutions to meet their requirements and enable them to achieve their goals.
“It also provides more scope for growth. Funding is provided against the debtor, so as the business expands and the need for funding increases, as opposed to reducing or remaining rigid, the funding actually increases in line with the debtor book,” he said.