While the bank was once the only avenue available to Britain's SMEs, they are now blessed with a whole host of options when it comes to sourcing the finance that they need to grow. From online lenders and invoice financing to crowdfunding and P2P, alternative finance has unlocked the door to funding for thousands of small businesses across the UK.
To support the continued growth of the UK's alternative finance sector, a group of lenders has come together to launch the Association of Alternative Business Finance (AABF), which aims to champion and promote best practice in the industry.
The association’s seven founding members, Fleximize, Catalyst Finance, Capify UK, The Just Loans Group, YesGrowth, Liberis and Credit4, have established four operating principles that all members will be required to adhere to:
One of the AABF’s key early initiatives is for members to create and subscribe to a centralized database for personal guarantees, which will prevent borrowers from over committing themselves and help identify potential fraudulent activity. It is looking to work closely with other established finance associations and welcome more lenders as members.
“A vibrant and diverse alternative lending sector has successfully established itself in the UK and we feel the time is right to give it a voice and promote best standards of industry practice,” said John Davies, chairman of the AABF and founder of The Just Loans Group. “Naturally SMEs considering alternative finance will have questions they want answered. In the future when they see the AABF logo they can [...] be reassured they are dealing with a company that totally embraces responsible lending.”
Max Chmyshuk, co-founder and managing partner of Fleximize, added: “Over the last few years, alternative lending in the UK has gone from strength to strength, and has become a viable source of funding for hundreds of thousands of SMEs. It is great to see the country’s leading SME lenders come together to share and promote best lending practices, improve security and transparency, and help shape the future of business finance in the UK. We are excited to be a founding member of the AABF, and look forward to working with everyone involved on achieving the association’s goals.”
For more information about the AABF, visit www.aabf.co.uk or follow @theAABF on Twitter.