In 2015, the alternative finance market in Europe grew by 92% to €5.4 billion. This represents a massive upswing for the industry and it has continued to rise since then. Alternative financing methods have been around for years, but it’s only recently that the sector has experienced a boom. This suggests that many businesses are now turning to alternative finance as a way to help them grow and succeed, finally proving its worth.
The UK is the largest market in Europe for alternative finance, with the same report finding that the total amount of funding raised through this method added up to €4.4 billion. This is a huge amount more than France, who came second with €319 million. On a whole, alternative finance lending jumped from €2.8 billion in 2014 and €1.13 billion in 2013 across the entirety of Europe.
Peer-to-peer lending was the largest section of alternative finance, both consumer and business, with equity based crowdfunding third. There are all sorts of alternative financing methods that have become popular as opposed to using banks and led to such growth. These include the likes of invoice discounting, grants, crowdfunding, venture capital and more.
There are various factors behind the rise in alternative finance. The main one of these is necessity, with many businesses unable to access regular financing options through banks due to the stricter acceptance criteria they now apply after the global financial crisis. Start-ups and SMEs especially found it difficult to access regular finance methods, so turned to alternative finance.Continue Reading