Female Entrepreneurs and Alternative Finance
Female business owners are still not fully aware of the alternative finance options available to them. Last year, the alternative finance market grew to £3.2 billion with a range of different crowdfunding and peer-to-business lending platforms entering the space.
The alternative business lending sector is beginning to take an increasing share of SME lending through investing in new financial technology and a dedicated focus on responding to business growth and investment plans.
The traditional banks have their strengths, but they are not always cut out to cater for SMEs.
There has been a surprising number of female business owners giving up on their investment plans when turned down by their banks for finance.
Research carried out on small and medium sized companies by Just Cash Flow PLC showed that one in three female business owners (35%) simply gave up when their bank initially said ‘no’ without looking at the other options available to them.
This was in stark difference with the amount of men – where only 24 per cent stated they had shelved their investment plans when they had been rejected.
When asked why, 69 per cent of female business owners said this was because ‘they weren’t aware of alternative sources of finance’ and 95 per cent couldn’t name one local commercial broker that could advise them on how to secure business finance.
This lack of awareness was also highlighted in a Government report on Women in Enterprise last year. The report showed that female entrepreneurs often find it difficult to know where to go for support when their business needs investment to grow.
Also, when they are directed, it is to government-sponsored options of which they might not always be eligible to apply for.
Alternative finance offers entrepreneurs what banks struggle to – a quick, seamless and uncomplicated system that is perfect for those on the go, or the many female business owners trying to juggle family life as well as running their own company.
Entrepreneurs, now more than ever, need flexibility and can’t always afford to wait for weeks to get an appointment with their bank and even longer to get an answer.
New lenders in this space are giving businesses rapid access to finance in a matter of days, helping them to invest and develop rather than stunting their growth.
It is very important for SMEs to be aware of alternative funding options available to fulfil their growth ambitions.