SMALL businesses are looking at alternative lenders to solve their cashflow issues in the event of a no-deal Brexit, according to small- and medium-sized enterprise (SME) funding platform Swoop.
Andrea Reynolds, chief executive and co-founder of Swoop, told Peer2Peer Finance News that they are getting an increasing number of enquiries about contingency arrangements ahead of the 29 March deadline.
“There are concerns that banks will pull back from lending, especially among older businesses where they’ve been through a crash before and their facilities were withdrawn very quickly,” she said.
“They are wondering whether they can trust the banks.”
There is greater awareness of alternative finance providers among SMEs now, Reynolds added, citing a recent report from the British Business Bank.
The annual Small Business Finance Markets report found that 52 per cent of smaller businesses surveyed across the UK were aware of peer-to-peer lending, up from 47 per cent in 2017.
70 per cent of smaller firms said they were aware of equity crowdfunding, compared to 60 per cent in 2017.
Read more: New SME funding platform launches
Swoop launched in Ireland last September and is seeing an increasing number of UK firms use the country as a “testboard” for their international expansion, Reynolds said.
“Ireland is a small, forgiving market and it’s very easy to get to from the UK,” she added.
“With Brexit as well, SMEs are realising that they need a foot in both markets.”
Swoop is on a hiring drive in both the UK and Ireland as it scales up the business.