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Folk2Folk: Romancing the disaffected, hand-in-hand with the big boys

PUBLISHED: 16:00 05 July 2017

Giles Cross, Folk2Folk

Giles Cross, Folk2Folk


The UK is now in possession of a vibrant, innovative and diverse Alternative Finance sector, with available solutions including Peer-to-Peer lending for debt finance, invoice trading, working capital loans and crowdfunding. And the reason for this?

No one can pinpoint exactly when, but sometime, somehow and somewhere between those heady, optimistic Brit-Pop, Cool Britannia days of the late 1990s and the financial crash of the late Noughties, traditional business banking “disappeared”, and with it went a legion of established and expected relationships, creating instead a generation of disaffected consumers, a new breed of finance providers and a fresh wave of financial activity.

No one’s to blame. It’s just what happened. Things change. It’s the way of things.

And now, looking at the AltFi UK Volume Index at the half year point, we believe that the amount of funding from marketplace business lenders projected to make its way to UK businesses by the end of 2017 could easily be exceeded as awareness of and demand for the Peer-to-Peer sector continues to grow. We see more and more businesses who are actively seeking out and preferring alternatives to traditional sources of finance, increasingly finding themselves the victims of inflexible customer “templating” and reduced corporate and shareholder appetites for lending risk.

The allure of this energetic and growing sector is easy to understand. Businesses want certainty, speed and simplicity when looking for finance and the promise of quick and transparent decision making processes with answers delivered in days and funds deposited within weeks is very attractive.

But this challenge to the historic dominance of the banks has not just created an environment of healthy competition; it’s created an opportunity for interaction and cooperation that can only be positive for British business, a chance to work together for the benefit of all.

Established SMEs will tend to approach their bank first when seeking finance; something natural and to be expected where long held and workable relationships exist, and often with success. But rural and smaller, entrepreneurial businesses are finding themselves increasingly unattractive to those institutions as the willingness to lend to certain sectors has fallen away, thereby creating an inflexion point where Alternative Finance providers can step in and collaborate with banks for the good of the customer, winning confidence and justifiable affection for both parties.

The opportunity for all involved professional parties - banks, lawyers, accountants et al – to work together to help find viable finance and lending solutions for their business customers can only be a good thing, effectively collaborating to deliver faster, better and happier funding experiences.

Customer disaffection is everywhere. It happened and we’ve got to live with it.

But by working together, traditional and Alternative Finance providers can romance “The Disaffected” back to a “happy place” where they can see and feel that their advisers genuinely have their best interests at heart, wanting to see them succeed, grow and prosper.

Folk2Folk is a Peer-to-Peer lender focused on helping to create and maintain financially and socially successful local communities. We exist to enable a “people powered” free flow of capital from local investors, attracted by the promise of 6.5% interest (a positive incentive for those suffering and requiring greater income in a frustratingly low interest economy – but that’s another article!), to support and finance local, rural and entrepreneurial businesses, generating growth and job opportunities, creating a sustainable form of trickle-down of micro-economics that works to the benefit of all.

Together, working positively and proactively with the traditional banking sector, we can win back the hearts and minds of business owners disenfranchised by circumstance and change, romancing small, rural and local business back into a winning mindset, saying “yes” to new and exciting ventures, helping businesses “crack on” and grow, benefiting both themselves and others.

Together, hand in hand, we can keep Britain booming.


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