Cash advance firm sees 100% spike from cycle retailers

Business cash advance company Liberis has told BikeBiz it has seen a more than a 100% increase in demand for its funding from independent cycle retailers across the country in the past year.

The average amount requested is around £15,000 with the most common uses being to buy stock, to fill a cash-flow gap and store refurbishment.

According to its CEO, Paul Mildenstein, “Demand from cycle retailers is up generally, but we saw a particular spike in the first quarter of this year, mainly for stock purchases. This used to be covered by bank overdrafts, but these are still in short supply for independents even though business confidence is coming back. 

“The funding choices for cycle retailers are better than ever before, with a wide range of options including crowd funding, business cash advance, peer-to-peer, business angels and pension led funding. The use of use of technology through online platforms is changing the way that small businesses can access capital, bringing efficiencies and convenience never seen before.” he adds. 

That said, he also warns many small business owners remain unaware that there are non-bank funders out there willing and able to lend money. In a recent survey with One Poll of 1,000 small firms, 45 per cent didn’t understand what alternative funding was or had never heard of it. The situation is made worse by the lack of research small businesses do into funding options. A British Business Bank study showed that 40 per cent of business owners spent under one hour researching funding and 20 per cent spent one to two hours.

Mildenstein’s advice to cycle retailers looking for business funding is:

• Do your research – an internet search will throw up a myriad of providers and independent portals that will signpost you to the most appropriate funding for your business. One example is www.alternativebusinessfunding.co.uk
• Become more financially literate -there’s a great deal of information online about the many different types of small business funding, how each model works and which type of businesses it’s best for.
• Approach alternative funders – a significant number of small businesses make no further attempt to find funding when turned down by a bank. Most alternative funders have online applications that are quick and easy to complete and don’t require elaborate business plans, plus the decision on your funding can be made within hours. They use modern underwriting, combining innovative credit scoring and information models that analyse risk in a more relevant way so you don’t necessarily need a perfect credit score.
• Use a broker – the National Association of Commercial Finance Brokers can find a broker in your area with access to a wide range of finance facilities, including alternative providers. www.findsmefinance.co.uk
• Appeal if you’re turned down for bank funding: 13 high street lenders now have ‘The Appeals Process’ set up which means that any small and medium sized business in the UK (with a turnover under £25m) has the right to appeal. www.betterbusinessfinance.co.uk/appeal