Attitudes change over time. That’s one of the inveterate facts of the world. What was once an outlandish and ridiculous suggestion, ten years later becomes the de facto norm. Finance is no exception to this – a fully-computerised loan process must have seemed mad when first suggested!
The newest change in the status quo of the financial world, though, is less about how you get finance, and more about where you get it. According to research by the fintech company ThinCats, businesses under ten years old are more than twice as likely to look at alternative lenders as their first port of call for finance. The research states that only 32% of younger businesses would consider their bank as their first port of call for finance, compared to 72% of their older counterparts.
In our eyes, this development can only be a good thing. We’ve been saying for years that your high street banks, who most businesses will have their accounts with, shouldn’t necessarily be the first port of call for any business looking for finance. There are more than 300 different lenders available in the UK – if you’re only looking at the high street, you’re limiting yourself to a tiny number of them.
With the rise of high-profile alternative lenders, along with new challenger banking alternatives, it’s no surprise that there’s been a rethink in traditional attitudes to finance sources in recent years. With that rethink comes new businesses who “grow up” in a more open world, and as such are open to different options. That’s also led to a rise in businesses who don’t get their finance from a bank at all. According to the study, 23% of young businesses would be happy to get their finance from an alternative finance platform instead of a traditional bank. Among older businesses, that figure was just 4%!
To us, the opening-up of the finance world is a welcome progression of attitude. There are far more options available for finance than people think; greater public knowledge of those options, and hopefully the acceptance of their usefulness across the finance world, is a benefit to every business.