GLI Finance: Failings of the credit eco-system continue to hold back the UK economy
The growth of the UK economy is being stifled by SMEs’ lack of awareness and understanding of the alternative finance sector and the continued failings of the credit eco-system, according to Louise Beaumont, Head of Public Affairs and Marketing at GLI Finance Ltd (GLI), the leading investor in the global alternative finance sector.
Speaking alongside a number of industry experts at Tuesday’s New and Growing Companies Forum in London, Beaumont stressed the important role that high growth SMEs play in powering the UK’s economy. Highlighting the need for structural and regulatory reform in order to ensure such businesses are able to access finance crucial to their development, Beaumont emphasised the important role of the alternative finance sector as regulatory pressure continues to compromise traditional lenders’ ability to service high-growth SMEs.
Commenting at the New and Growing Companies Forum, Louise Beaumont, Head of Public Affairs & Marketing, GLI Finance, said: “The industry and its stakeholders must collectively address the key issue of awareness and education. SMEs are too often under the false illusion that to secure funding they must turn to traditional banks as this is ‘where the money is’. This perspective is at best inaccurate and at worst fundamentally detrimental to their future.
“In reality, the alternative finance sector often has better resources and, more importantly, offers solutions and products which are better suited to the needs of high-growth SMEs. For example, providing flexible solutions to ensure funding is available when it is needed most, say to fulfil a big order or finalise a crucial deal.
“Government support has been invaluable in boosting the growth of the sector and we hope that this will continue. The bank referral mechanism in the Small Business Bill will be instrumental in the continued growth of alternative finance, and the all-party support has been welcome. The focus must now shift to implementation and ensuring vigilance when monitoring the process.
“Similarly, the FCA has tackled the issue of regulation well, but they must ensure that this approach is consistent and sustainable. Key measures to date have centred on niches such as Equity Crowdfunding and Peer-to-Peer Loans. To secure the long-term sustainable growth of the sector we must move beyond this and develop consistent regulatory frameworks for the entire spectrum of alternative finance solutions. Perhaps only then will SMEs have the confidence and understanding to recognise the power of this type of funding in supporting their growth and sustaining the UK’s economic recovery.”