If accountants want to most effectively serve their small business customers, they must not ignore the alternative lending industry. That’s the takeaway from a recent speech made by Intuit vice president and head of Intuit UK Rich Preece at the Accountex 2015 conference this week.
According to reports, small businesses today are still facing high failure rates due to their inability to access working capital, and are often turned down from mainstream banks. “Accountants need to know about alternative lending options to be able to help small businesses make informed decisions and avoid the cash flow problems that put them out of business,” he told the audience.
The remarks highlight a possible gap in knowledge among accountants, as Preece highlighted that while alternative lending is not entirely novel, it is not necessarily an area in which accountants are well-informed.
Experts in the financial services sector continue to support the alternative finance market, championing the industry as a viable option for SMEs turned away from big banks. Small businesses in the U.K. are especially fueling the discussion as politicians look to combat late payments to SMEs and overall improve their financing options.
Another revelation made by Preece at the event was the rise of startups led by entrepreneurs over the age of 50. That is a demographic, he said, that accountants should also be paying attention to.
“Shows like Dragons’ Den – although enjoyable – have done a bit of a disservice to these SMEs,” he said. “If you aren’t the typical 20 something, you aren’t considered at the forefront of small business, which isn’t true.”
The executive cited statistics from Intuit that revealed 70 percent of startups launched by business owners over the age of 50 survive their first five years in operation. That figure compares to just 27 percent of startups launched by people the age of 20 and 30.