What is Alternative Finance?

With Glenville Walker Consulting having recently launched its Banking Review Service, provided by Alistair Howard and Simon Robb, these regular articles / posts are designed to keep you abreast of the latest news in the Banking Sector, and provide some thoughtful pointers as to why you might want to periodically review your banking arrangements.

Alternative Finance

The concept of Alternative Finance is something we keep hearing about, but what is it? At Glenville Walker Consulting, we thought it might be useful to explain a little more, as the advent of Open Banking is likely to mean there will be quite a few new “players” in the marketplace over the next two or three years.

What is Alternative Finance?

Alternative Finance is a collective term for non-bank provided funding. Historically, there were very few funders not linked to the major high street banks and building societies. Bibby Financial Services, originally from Liverpool, is the local obvious exception. Such funders, being “independent” of the banks, have become collectively known as Alternative Funders.

Since banking rules and regulations have been opened up, the range of products and services offered by Alternative Funders has expanded enormously, and now includes :-

• Bridging Finance
• Asset Backed Loans
• Unsecured Loans
• Invoice Discounting
• Factoring
• Foreign Exchange Specialists
• Crowd-Funding investment schemes
• Peer-to-Peer Financing
• Co-Operative Loan Schemes
• And many more!

All of the above can be accessed without going through a mainstream lender. And as Open Banking obliges the mainstream banks to provide their data elsewhere, if the customer wants, it is about to become a much more active market.

What this means for the growing business is Choice.

In a market where choices have, for decades, been very limited, especially since 2008, this has to be good news. A competitive market usually delivers better value services for the consumer – which has to benefit the business community.

Of course, some caution will have to be exercised. No finance provider is obliged to assist your business – they are commercial animals too! If you take away the most lucrative aspect of your business from the banks, they may charge you more for the left-overs or decline to provide them at all. So the best advice is to make sure you understand everything that the business needs, and then tailor your requests to ensure nothing vital is missed.

We think it is critical to make sure you understand exactly what you have, and what it is costing you before you move your business elsewhere. For Business Customers, the Glenville Walker Consulting Banking Review team is here to help you.

So please do contact Hazel Walker, Commercial Relationship Manager for any further advice on 0151 305 9654 or hazel.walker@glenvillewalker.com 

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