While the alternative lending space in the U.S. may be in a bit of trouble, the industry saw a massive rise — both at home and abroad — thanks to the allure of faster financing for SME borrowers.
The U.K. now has a new alternative lending marketplace, and with all of the options available to small businesses, one may wonder how new market entrants can compete.
Reports on Thursday (May 12) said the new player, lendinghive, claims to be the industry’s first 24/7 lender.
Lendinghive is the product of LDF, a corporate financial services firm. According to reports, earlier this year, LDF partnered with the British Business Bank, generating a multimillion dollar credit facility for SMEs.
The launch of lendinghive is LDF’s foray into FinTech, reports added, created on the basis of recent research conducted by LDF that found about half of SMEs are using personal funds to finance their business. Many of them do so because it's faster to access their own money than to source from a third party, the company found. Almost one-third said they are not interested in working with a bank because the application process is so lengthy.
“As our research shows, British SMEs are still struggling to obtain finance quickly when they need it and are often turning to personal funds as a panic, without being aware of the alternative options available to them,” said LDF Managing Director Peter Alderson in a statement.
“We recognized a huge demand to provide SMEs with funding 24 hours a day, and lendinghive has been launched to do exactly that,” he continued.
LDF’s research also found that more than half of SMEs still consider taking out a loan as a negative for their business and a sign that a company is struggling.