Small and micro businesses searching for funding are usually in need of advice as well as finance, according to the CEO of finance disrupter Funding Xchange.

Speaking to Parliament’s Treasury Select Committee this morning, Katrin Herrling spoke about the need for education in the finance sector, especially for those smaller businesses not used to searching for funding.

She said: “From our experience, many smaller businesses are unaware of the various funding options available to them. As a result, many find it hard to access the finance they need.

“At present, alternative finance is finding solutions for 30% of our customers, so there is obviously a large gap to fill still.”

She told MPs that there is a real trend towards self-employment at the moment, with lots of businesses that are not ‘asset rich’ seeking funding.

“The industry needs to cater for the small or micro business owner who is looking for finance in the middle of the night, but it’s essential that the advice is there to inform them which option is best for them,” she said

Katrin also highlighted the effect of automation on the alternative finance industry, especially by making use of recent updates including Open Data.

She added: “The finance providers that offer the most automated lending experience are able, because of their cost of service, to finance requests that are more marginal. We see this as a real opportunity for growth for the industry.”

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About Funding Xchange

Funding Xchange is the leading business funding market place. The innovative platform links businesses to the funders who are most likely to have an appetite to lend to them.
Funding Xchange was one of the four founding portals appointed by the government to provide a declines platform for businesses being declined by their mainstream bank on loan applications.
The platform works with a range of high profile business advisors, such as KPMG, and with most of the banks and lending providers, providing access to finance for many SMEs who wish to grow.