Alternative Finance ‘vital’ for Northern Ireland SME’s

Due to the continued improvement in technology and the increased take of online banking, banks and building societies have continued to close branches across Northern Ireland. At the same time, businesses here have had to adjust to the reality that accessing finance from traditional lenders has become much more difficult since the financial crash of ten years ago and the ensuing credit crunch. Put simply, the ability for SME’s to access finance to grow their business is no longer a simple case of hoping the local bank manager likes the ‘cut of your jib’ – you need alternative finance.

Now, for more and more business owners, alternative finance has become another option to secure adequate business funding. That’s according to Conor Walls, Managing Director at Exchange Accountants, who said: “The financial world is constantly evolving, and it’s no surprise that we’ve seen local businesses embrace alternative finance. The reality is that the ability to secure funding is often a vital factor in the successful growth of a business, and we have found that in recent years, the funding void left by traditional lenders has been filled by boutique funders and alternative finance.

“It’s certainly a service on the rise, and in recent months we have found ourselves working with clients to access alternative finance for a variety of needs, from loans in excess of £100,000 for long term investment through to funding for shorter term working capital requirements”, he added.

Businesses can access alternative financing through a variety of different forms, but most commonly it is secured via friends and family, Peer-to-Peer Lending, Angel Investors, Venture Capital Investors, Crowd Funding, Equity Finance, Invoice Financing and Asset Finance.

Funders will often have key criteria which must be satisfied before any finance is provided, and borrowers can expect to be required to explain in detail what the growth potential of the business is and how the money is going to be used, as well as showing how they will be able to repay the borrowings and what security the borrowers can offer.

Securing alternative finance may appear to be a daunting prospect to the uninitiated, but according to Mr. Walls the most important step that business owners must take is to educate themselves on the pros and cons of each method of funding and ensure that they are as prepared as possible:

“We would definitely say that having a real understanding of what’s on offer is crucial to securing successful alternative financing, and I would advise every business owner to ask questions and consider their options,” said Mr. Walls.

“At Exchange Accountants, we spend a lot of time working with our clients to help them secure the funding that suits their business needs. This ranges from identifying their value proposition, preparing Profit and Loss and cash flow projections to show funding requirements and, more importantly, the ability to repay any borrowings, through to preparing an application and meeting with a funder on their behalf.

“We would say that the key to successfully securing alternative financing is to know what your requirements are and to arm yourself with the knowledge to identify the best possible deal for your business,” he added.

Established in 2011 with officers near Belfast City centre, Exchange Accountants provides premier accountancy services and tax advice to a wide variety of locally based SME’s and individuals.

Over the past five years, the company has developed a specialism in digital and cloud accountancy services and was the first accountancy practice in Northern Ireland to be recognized as a Gold Partner with market-leading cloud accountancy software provider, Xero.

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