We are beginning to see a change in perceptions of investors in the UK. Debt funds have opened the market up for retail investors with a lower entry point helping to democratise the alternative investment arena. The fund also offers a chance to use capital to support British business instead of leaving it in the bank, taking pride in a share of the future-proofing of the economy and driving our private sector forward.
One of the reasons a business may opt for debt finance is that it allows a business owner to stay in control of their company. While for equity finance, a founder will have to sacrifice a portion of their ownership – or equity – in exchange for the funding. With debt finance, the only cost to a business is the interest charged on a loan.
Debt finance has become increasingly valuable for SMEs in the UK searching for growth funding. It has also become a great option for investors to increase their rates of return in a period of historically low interest rates.
IW Capital is opening up the new secured debt fund to private investors, with a £10,000 entry point for individuals who want to lend to SMEs. This will allow more people to have the option of supporting the fantastic range of small businesses that exist in the UK. IW Capital’s new secured debt fund offers private investors potential returns of 7%.
Securing funding as a start-up is often one of the biggest challenges that new businesses face in the primary stages of set-up. Not only is it often difficult to secure the funding itself, it is even more so when trying to get the right kind of funding for what the specific needs of the business are.
Having structures in place to make it as easy as possible for innovative ideas to flourish and become fully-fledged, is not only to the advantage of entrepreneurs and innovators, it is also key to the Government’s plans for strengthening the UK economy. SMEs make up 98% of private sector businesses and contribute £1.9 trillion to the UK economy and so allowing this sector to grow and bolster its numbers is absolutely key to the future. IW Capital are at the forefront of the increasingly dynamic and crucial alternative investment sector, both for investors and SMEs.