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Peer2Peer Finance News | July 19, 2019

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MarketInvoice: SMEs favour invoice finance over business loans for growth

MarketInvoice: SMEs favour invoice finance over business loans for growth
Marc Shoffman

ONLY one in 10 small- and medium-sized enterprises (SMEs) would use a traditional business loan to grow their firm, research claims.

A poll of 1,000 business owners by MarketInvoice found invoice and asset based finance were the most popular funding routes, cited by 26 per cent and 22 per cent of firms respectively.

The data, part of the peer-to-peer lending platform’s business insights survey, also analysed 990,000 limited companies registered with Companies House and found SMEs are worth an average of £2.9m and £3trn cumulatively.

Asked what the key factors in their company valuation was, 17 per cent of business owners cited their premises and 15 per cent highlighted their product or people.

Read more: Barclays takes stake in MarketInvoice in SME drive

Read more: MarketInvoice secures £56m of equity and debt funding

A lack of finance was cited as the biggest factor stopping firms growing and therefore increasing their company valuation, with just 30 per cent of businesses increasing their value by more than 10 per cent over the past 12 months.

The research did, however, suggest businesses were optimistic about the future despite Brexit turmoil, with 56 per cent hoping to open offices abroad and to start exporting to global markets.

“Business owners seem to be driven by company valuation but acknowledge how the right kind of finance can really help drive that number,” Anil Stocker (pictured), co-founder of MarketInvoice, said.

“It is imperative that they stay focused on their product or service offering and ensure the fundamentals are right first.

“This is as much about managing cash flow and working capital as it is about having the right people in the right roles. A well-oiled business will look after itself. Essentially, getting the basics right will drive their businesses forward and the valuation will take care of itself.”

Read more: MarketInvoice confirms departure from P2PFA