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When you need working capital for your business, the search for a provider can be both stressful and time consuming.

A few years ago, visiting your local bank to ask for a business loan or overdraft was the only option, but since 2008, small businesses have struggled with this traditional source of finance.

According to the Bank of England, bank lending to small businesses via overdrafts has shrunk by over £5 billion since 2011. Many businesses now find it nearly impossible to get approved for a new overdraft with their bank, and instead have turned to alternative providers.

Banks typically rely on a ‘one size fits all’ model which does not suit many modern businesses, but today there is a new option: alternative lenders are becoming the go to choice for small businesses. These new providers are able to supply better terms, a simpler application process and quick decisions, creating an entirely new borrowing experience. The best providers are using their increased efficiency to offer their clients better rates and new products, exhibit greater flexibility when it comes to security and provide more transparent terms.

Alternative providers can offer working capital in a matter of days, which is great news for small businesses. The extensive documentation businesses are required to give can become troublesome for early businesses, causing traditional providers to take a few weeks to send out an indicative offer. With dedicated risk teams, alternative providers can establish the credit worthiness of a small business based on a wider range of factors, not just their financial statements.

Modern platforms have begun offering curated insights to better equip small businesses to grow. This personal touch is hard to find anywhere else when it comes to small business finance. Furthermore, alternative providers are known for their superior customer service and relationship approach.

A recent report by the Cambridge Centre for Alternative Finance, and UK innovation foundation Nesta, showed that alternative finance platforms made up 12% of the UK market for small business lending. The Global Retail Banking report found customers had an overall positive experience with alternative lenders, significantly better than the experience they had with traditional banks.

Alternative finance has many forms: overdraft facilities, loans and invoice financing. Today, your business has many choices for finance, whether you need help maintaining cash flow throughout slower months in the year, or because you are planning on investing in growth, alternative finance is a great option for growing businesses.

By James Sherwin-Smith, CEO, Growth Street