When it Pays to be Open With Accounts Information

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Nick Moules
3rd November 2014

Peer-to-peer lending is a mentality shift for some people looking to raise business finance.

Some embrace the extra exposure to potential customers that a loan auction offers or reliable access to a fast and secure line of funding, while others are cautious about the general public viewing accounts information and asking tricky questions.

As a funding provider, we’re keen to bust a few myths around alternative funding…

For businesses, the nature of reporting to Companies House means accounts information is publically available. If your competitors wanted to view your abbreviated accounts they could download a document, or pay for a credit agency report. Our process means only registered investors can see your vital statistics, so there is no need to be nervous about where your accounts might end up. Openness also wins support and trust. One of our borrowers at a conference we held in early 2014 said:

“Culturally, as businesses, we’re encouraged to keep our information to ourselves, but what difference does it make? It has to be a positive thing to give people more information, so you gain their trust. From now on, I’m going to file full accounts – I don’t have to – but I want people to know how well we’ve done.”

That particular borrower raised £48,000 through rebuildingsociety to finance the purchase of an asset from the United States that traditional asset finance providers wouldn’t touch because it had to be exported.

There is also a perception that if you’re applying for finance, you can’t be running the business in an efficient way. Again, that’s simply not true in the vast majority of cases. Anyone working in the FMCG industry for example will know the time between issuing an invoice and being paid does not always correspond with paying for your next batch of goods, or meeting a one-off order.

Finance for growth is a positive story, it shows ambition, not recklessness and managing debt effectively is a skill that can grow businesses fast and responsibly.

Finally, some people might baulk at the thought of it being publically known that they’re applying for business finance through an alternative provider…

Aren’t they lenders of last resort?

This may have been the case five years ago when the market first established itself, but things are very different now. If you’re looking for finance quickly with no hidden nasties, competitive rates and no early repayment charge, it trumps other forms of finance.

We increasingly find that businesses are approaching us first because they can raise awareness of their business with people that would not otherwise have known about them and they can see the positives of widening their contact network.

Alternative finance might have some new aspects, but it certainly shouldn’t be scary.

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