Looking back on a year of business finance at Metis Funding Solutions, we have identified a growing divide between new and old mid-sized businesses when it comes to sources of external funding.
While older businesses are still most likely to approach a high-street bank first for funding, our experience suggests that younger businesses are much more confident about seeking alternative finance.
This was borne out by a ThinCats survey from earlier last year, which found that while 71% of older SMEs (over 35 years old) still approach a traditional bank for funding, this figure drops to 31% for younger businesses (under 10 years). Similarly, just 4% of older SMEs pick an alternative finance platform as their first-choice lender, compared to 22% of younger businesses.
So why is this? There’s no doubt that in some cases it’s simply that young businesses are willing to be more adventurous and look beyond the high-street bank option. In addition, many of the younger businesses we work with offer services such as media, marketing and IT, which have few tangible assets as collateral for a traditional bank loan and are more suited to alternative finance.
Moving forward, we’ll do all we can to counter this ageism! Whatever a business’ stage and stance, we analyse its unique position, challenge preconceptions and deliver high-quality, tailored advice. We’ll continue to do this throughout 2020, opening up the best possible finance solutions for businesses young and old.
Published: February 4