Alternative finance holds the key to funding expansion for many British small businesses, as access to funds from traditional lenders remains restricted. According to a recent survey of 1,000 small business owners, almost one in three reported difficulties in securing business loans from banks, potentially halting their expansion plans^[1].

To help address this issue, Worldpay has announced a three year extension of its popular Business Finance scheme, aimed at helping over 300,000 British small businesses access alternative financing by enabling access to a “cash advance” based on their future credit and debit card sales. The scheme, launched in 2015 in partnership with Liberis, a leading provider of cash advances to small businesses, has already provided funding in excess of £50 million to UK SMEs. Under the scheme, funds can be made available to businesses in as little as 72 hours.

Chris Andrews, proprietor of Blacks Cheese, is one business owner who has utilised Worldpay Business Finance to help address stock purchasing needs.

“Worldpay Business Finance became apparent as an alternative method of funding the business, at a time when we needed it instantly and it was delivered within a matter of hours. Worldpay is now part of our financial reckoning, and it’ll be one of our tools that we’ll always use and it’s not going to be something that we need to consider. We know how it works, we know how it funds us – it’s paid off for us.”

Alternative finance, while available to all types of small business, is proving particularly popular with start-ups. Worldpay’s research revealed that businesses under five years old are as likely to select alternative finance methods to secure capital as approaching banks. Analysis by Worldpay of how these funds are used reveals that in 2017, direct investment in businesses, including stock purchase, expansion & refurbishment funds and equipment purchases drove 87 per cent of the cash advances.

Despite its growing popularity, the research also revealed that business cash advances are among the least known forms of funding, with only 2 percent of businesses indicating an intention to use this form of finance in 2018. At the same time, business owners aged under 35 indicated they are more likely to place their confidence in alternative financing as a way to reduce their reliance on banks, with 40 percent stating its emergence will make things easier. With the extension of the Business Finance scheme, Worldpay and Liberis will work to address this lack of awareness.

“Steve Newton, Executive Vice President, UK and Europe Worldpay said: “Worldpay Business Finance has proven extremely popular with small businesses looking for alternative methods of finance. Worldpay Business Finance was created specifically with the unique needs and structure of small businesses in mind – it’s flexible and it’s fast.

“In 2017, we tripled funding for growth to UK SME businesses and have now advanced over £40million – but we know that this form of funding has the potential to help thousands more.  So over the next year, we’ll make it easier to access the scheme by increasing call centre and online support to enable Britain’s small businesses to thrive.”

Rob Straathof, CEO at Liberis said: “SMEs contribute more than £200bn a year to the UK economy; and as this is only set to increase, access to funding is certain to remain integral to their growth. As such, we’re delighted to be continuing our partnership with Worldpay, as Worldpay Business Finance, enabling us to help even more small businesses in the future. Enhancing this opportunity, we will be prioritising education and collaboration to successfully secure the livelihoods of small UK businesses.”