If you were to believe the mainstream press and media, the UK private sector begins and ends with the FTSE 100 companies. The reality is somewhat different: it is thought that so-called 'micro' entities (defined as businesses who employ ten or fewer staff) account for more than two thirds of private sector employment.

If you run one of these micro businesses and you need to raise between £25-50k on an unsecured basis, where do you go? Banks are starting to show an appetite to lend again, but what are the alternatives?

Finance Wales is an option, in particular their small business loans for £25k are subject to a fast-track process.

Another option, which has risen in prominence over recent years, are peer-to-peer lenders, such as Funding Circle. Put simply, this is a marketplace that brings investors and borrowers together. Investors get a decent return on their money (average gross yield approx 6.3 per cent after bad debts – far better than the return on any mainstream savings account) and borrowers get a chance to raise finance that they wouldn’t otherwise have been able to access.

The basic requirement for applying is that the entity has been trading for a minimum of two years. However there is no requirement for forecasts, which saves on professional fees.

Rates are typically more expensive than with banks, however the speed and flexibility with which they operate is swift. Our financial planning arm, Carbon Financial Planning, has significant experience in this area (raising over £1m for clients to date) and is a registered Gold Broker, which can fast track your application.

If you are interested in finding out more, then please get in touch on 01633 213 318.