Business Finance Blog

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Crowd Funding ? AN alternative not THE alternative to Bank finance


    At Business Finance Services Ltd (BFS) we have been involved in helping SME’s to raise finance for more than 10 years. Over that time we have discovered, and successfully introduced, a wide variety of types of non-traditional funding to our clients. Few of these “Alternative” forms of finance, however, have generated as much interest as the relatively recent concept of Crowdfunding for Businesses.

    Put simply this is a concept that allows Businesses to raise finance from private individuals rather than through the more conventional, but often less accessible, Banking route. The way it works is that the Business presents a case (via the Crowdfunding Platform) for why they need a certain level of finance. Investors (in most cases you & me – The public) are invited to provide whatever level of finance they think appropriate, in some cases as a loan at an agreed rate, in others in return for equity in the business. Most Crowdfunding Platforms offer one or other option, a few offer both.

    The concept has been proved in many cases to work well. The problem for the Business owner is to choose which Crowdfunder is most suitable for their needs. Do they choose Funding Circle or Crowdcube or Kickstarter or ThinCats, to name a few? In the case of smaller businesses there may also be a question of “how do we best present our case?”

    At BFS we have been talking to, and working with many of the Crowdfunders for some considerable time. As a result we have carefully selected a number to work with, all of whom offer different funding solutions, so that we can offer our clients the best possible option with the highest possible chance of raising the funding they seek. Of particular note is that in 2014 we (BFS) were appointed as one of an exclusive band of “Sponsors” for ThinCats, one of the UK’s leading Crowd FundingPlatforms who specialise in loans from £100,000 up to £5 million.

    It is important to understand, however, that whilst Crowd Funding is an innovative and valuable addition to the Business Finance arsenal, it is only AN alternative and not THE alternative to traditional Bank lending. Indeed it only represents a fragment of the “Alternative Business Finance Market”.

    Furthermore, funding is by no means guaranteed with any of the Crowdfunding Platforms. Much depends upon the Funding Platform chosen and the manner in which the opportunity is presented. Thus if you are in need of finance and your Bank cannot help, come and talk to us at BFS. Just call us on 01327 349779 or 07770 866 955or e-mail to for a no-obligations chat. It should also be said that if we do not think the Crowdfunding route is the right one for your business we will say so and do our best to find a more suitable “alternative”.