Industry expert Ivor Freedman speaks to us about how and why SMEs are turning to alternative funding sources such as Peer-to-Peer lending and crowdfunding.
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The Rise of Alternative Business Lending
Published by Uma Rajagopal
Posted on August 1, 2014
1 min read· Last updated: March 1, 2019
Key Takeaways
- SMEs face traditional funding gaps and are turning to P2P lending and crowdfunding for faster access to capital.
- Peer-to-peer lending often suits SMEs with moderate credit profiles seeking medium‑term financing.
- Crowdfunding democratizes access to capital, enabling SMEs to reach many investors online.
- Alternative finance complements rather than replaces traditional bank funding.
References
Frequently Asked Questions
What is alternative business lending?
Alternative business lending includes peer‑to‑peer loans and crowdfunding platforms that connect SMEs with investors outside traditional banks.
Why are SMEs using P2P lending?
SMEs use peer‑to‑peer lending because it can offer quicker access to medium‑term loans, especially when traditional bank access is limited.
How does crowdfunding benefit SMEs?
Crowdfunding allows SMEs to raise capital from numerous small investors online, democratizing investment opportunities and broadening access to finance.
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