CROWDFUNDING has been highlighted as a key source of funding in a new guide to help small- and medium-sized enterprises (SMEs) fund property developments.
Trade body UK Finance and the Federation of Master Builders (FMB) have launched the guide for SME housebuilders to better navigate the development finance process and access the funding they need.
The guide points towards mainstream banks and building societies as popular sources of funding, but it also suggests that SME developers should consider alternative finance options such as crowdfunding.
This could comprise debt-based funding, i.e. peer-to-peer lending, or equity crowdfunding.
“The range of finance options available to SME housebuilders is now greater than ever, from traditional high street lenders to crowdfunding and government-supported schemes,” said Stephen Pegge, managing director of commercial finance, UK Finance.
“But too often SMEs are deterred from applying for finance because they are unsure about where to look or whether they’ll be successful.
“This guide is designed to help smaller housebuilders navigate this diverse landscape and find the right form of finance for them. Through close cooperation between UK Finance, the FMB and the government, we are determined to help SME builders grow their business and build the homes the country needs.”
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The publication of the guide follows the announcement of several schemes aimed at increasing funding for SME housebuilders. These include the government-backed Housing Delivery Fund and the Housing Growth Partnership.
“Smaller housebuilders in particular face challenges accessing the finance they need and this new guide provides useful, practical information on the available options that will help them build the homes the country needs,” said the government’s small business minister Kelly Tolhurst.
“As part of our modern industrial strategy, the government is working with the construction sector to boost skills and foster modern building techniques to help the sector reach its full potential.”
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