What does a business need to know before borrowing money?

These may be able to offer companies quicker and more flexible loans that they can control, as opposed to having to jump through hoops currently set out by some financial institutions, where getting funding can take many months.

The Rise of Peer-to-Business Lending

The rise of P2B lending is reflected in the figures, with Assetz Capital having funded over £75,000,000 in just two years since we launched.

It’s clear that many have already benefited from the new way to gain business funding, but many more are still unsure about how to go about it, despite their interest.

Below are some starting points if you are looking to explore the possibility of borrowing money from a peer-to-peer lender.

Understanding the Market

Much like starting out as an investor, knowing the market is key.

There are a number of alternative finance options out there, all carrying their own merits. And, of course, each one is appropriate for different circumstances and size or age of your business.

For example, early stage businesses may benefit from equity crowdfunding as it can garner a supportive crowd, while also providing a source of funding in return for a relatively small chunk of equity.

For more established companies – those we tend to work with – a loan or invoice finance are more likely the most appropriate options. They don’t want or need to give away part of their business, but need working capital for various reasons.

Unlocking the money in a short-term invoice can be a great way of accessing a regular flow of funds to aid growth, while a loan over a year or more can be equally appealing to help expand internationally, purchase a new factory or add machinery. All with the intention to grow and develop.

Loan sizes can vary from £50,000 right up to £5m, all depending on what the business needs based on its turnover.

Consider Your Options

Should you decide P2B lending is the way forward, it’s worth having a look at what the different platforms can offer.

There isn’t a right or wrong way of doing it but when speaking to companies, Assetz Capital is pragmatic in its approach. We consider numerous attributes and take our own time to visit each and every one to understand the business model, and what assets it has and how prosperous it may be.

It’s vitally important that we do this so that businesses get the right loan terms for them, while also satisfying our investors who will be lending their own money.

You don’t have to take our word for it, and you shouldn’t. Our website is completely transparent and where we can, we disclose a raft of information. Independent forums and media articles also give you an idea of the big alternative finance solutions out there.

We’re one of a few out there who have the experience and knowledge to lend professionally to businesses. And as every good finance director will do, it’s important to speak to the people behind the platforms to gain understanding and confidence in their ability to deliver.

For more information on Assetz Capital loan or invoice finance, visit retail.assetzcapital.co.uk/borrowers-brokers/

- July 1, 2015