Debt finance in the SME arena

16th January 2019

In what has been a dramatic week of Brexit rhetoric and hyperbole, not to mention the rejection of Theresa May’s Brexit deal, it remains clear that UK SMEs are absolutely vital to the success of the economy moving forward from this vote. Ensuring their continued success and growth by way of securing routes of finance and investment at key growth junctures will be of the utmost importance.

Since the 2008 financial crisis we have increasingly seen the reluctance of banks to lend to these small businesses, especially those that are not asset backed. This is where the alternative finance arena including private investors have stepped forward to bridge this funding gap and allow what is a world leading private sector to secure the finance they require to grow and thrive.

Alongside equity options, SMEs that are looking towards private investment are additionally exploring debt options as a possibility. These often provide more nimble and speedier finance than that of traditional lenders. IW Capital have recently launched their debt fund to provide for this type of funding to SMEs, whilst simultaneously providing attractive investment opportunities.

Our offering not only allows businesses to secure funding at rates that would otherwise be unavailable from most traditional banks or lenders, but also gives investors the opportunity to make the most of their capital in a time of historically low interest rates. These new innovative ways of securing alternative finance will surely be a prominent part of the Government’s industrial strategy for those that have founded their businesses upon intellectual property and new technology.

We are beginning to see a change in the perceptions of investors in the UK, previously the view has been that investing is reserved for the very wealthiest of society but debt funds have opened it up to retail investors. These individuals are financially empowered and are looking to use their capital to support British business instead of leaving it in the bank, taking pride in this share of the future-proofing of our economy driving private sector.