The market for SME (Small and Medium-Sized Enterprise) funding is changing radically, and provides both opportunity and risk for those seeking to be active in the market. The Alternative Funding Network (AFN) provides its members with intelligence and industry insight on the developing issues that really matter. This is achieved through a mix of exclusive industry seminars, regular commentary, research and secure peer-to-peer networking
Andy Davis is the Programme Director for the AFN. He has a longstanding interest in business finance, previously as Editor of FT Weekend and more recently as a researcher, commentator and advisor on the game-changing developments unfolding in the SME funding market.
The Alternative Funding Network runs a series of seminars throughout the year, chaired by Andy, these always feature leading figures.
Alternative Funding Network’s Research Seminar Series: Reinventing the Business Overdraft.
Thursday 3rd March 2016, 6:30pm – 8:30pm
Metal Box Factory, 30 Great Guildford Street, London, SE1 0HS
Nearest Tube: London Bridge
Over the past few years the number of overdrafts approved for small business customers of major banks has declined by more than 40%, while at the same time a range of alternative products that cover short-term cash flow requirements have appeared from a variety of sources. In the next Alternative Funding Network seminar, we bring together a panel of companies that are providing alternatives to the traditional bank overdraft to discuss how this vital part of the small business funding market is evolving and to examine how the new products work.
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Our Panel will include:James Sherwin-Smith is the CEO of Growth Street an alternative finance platform for SMEs that offers borrowers better finance terms on business overdrafts. Prior to Growth Street, James worked at MasterCard and management consultancy Oliver Wyman, where he led digital banking and payments across EMEA.
John Davies is the founder of Just Loans Group PLC. John focuses on helping to bridge the funding gap that restricts the growth of British industry. The company helps businesses to invest and grow through its three subsidiaries, Just Cash Flow PLC, Just Finance Loans & Investments PLC and Just Bridging Loans Plc. John draws on his 30 plus years of experience gained through founding and running a number of companies to give guidance to existing and potential business owners.
Paul Mildenstein is the CEO of Liberis. Liberis focuses on bringing a breath of fresh air to the industry, by helping to ensure the hard working SME market thrives by having access to the funds it needs. More than that, Liberis is doing it in a simple, no nonsense way.
A Background Note from Andy:
Last September 2015, two data releases came out that deserve the attention of anyone interested in SME finance – and especially anyone who like me has been struck by the ongoing disappearance of the small business overdraft. The steady drop in the number of overdraft approvals is probably the clearest signal of the huge structural change now unfolding in the way smaller companies finance their working capital.
BBA data confirm a trend that’s been running for at least four years: the number of overdraft approvals is shrinking fast. In the first half of 2012, BBA members approved 114,707 overdraft applications from smaller companies (usually defined as having turnover of up to £2m). In the first half of this year, they approved 60,133, a decline of 47% in three years. If that isn’t a structural change in a major market, I’d like to see one. Among mid-sized businesses (about £2m-£25m turnover) approvals dropped from 17,001 in H1 2012 to 13,240, a 22% decline.
Companies might have stopped applying for overdrafts because they no longer believe they have a chance of getting one. Given the reputation of most banks, that’s perfectly possible and the Monitor reports that 3% of SMEs wanted to apply for an overdraft but didn’t, the two main reasons being that they felt discouraged and that they process was too long and expensive.
So it looks like several things are happening. Fewer companies are applying to a bank for an overdraft. Some of those that would previously have done so are being diverted to alternative providers. But a lot more of that former demand for overdrafts is being replaced by bigger holdings of cash.
To read the rest of Andy’s views, click-here.
Workspace customers can attend this seminar free of charge.