News Briefing - Crowdfunding, SME And Alternative Finance

crowd in nightclub, seen from a DJ point of view

1.UK – AltFi/SMEs

Best Advice reports:

“52% of UK SME owners have business ambitions they feel they are unable to fund, according to research from alternative finance provider Nucleus Commercial Finance.

According to the latest research, it’s business owners in the capital who are struggling the most to match their ambitions, with 61% of London SMEs unable to access funds.

London SME owners want to expand their business beyond the capital, but they are currently unable to do so.”

2. UK – AltFi/SMEs

Crowdfund insider on Brexit and SME lending.

Innovate Finance, an advocacy association for the development and support of the UK Fintech industry, has published a report on Brexit and the impact it may have on UK based Fintechs.

According to the report, 55% of Fintechs feel well prepared for Brexit but that percentage sinks to just 22% if the UK ends up in a no-deal situation. The survey numbers were culled from early-stage Fintechs with 92% being startups, scale-ups or high-growth Fintechs.

The looming UK divorce with the European Union has played out in slow motion in the past couple of years. The election of Prime Minister Boris Johnson initially appeared to set a line in the sand with Johnson clearly stating that the UK will exit Europe come October deal or no deal. Today, that is not so clear as the PM and Parliament engage in a political struggle regarding Brexit strategy. The biggest risk of Brexit, of course, is the impact on the UK economy – the second largest in the EU.”

3. UK – AltFi/SMEs

The FCA is concerned about the sectors lack of preparedness for a hard Brexit.

“Financial firms not prepared appropriately for a no-deal Brexit may risk an impact on their business, according to an update from the The Financial Conduct Authority (FCA).

Brexit will result in the loss of passporting for UK firms doing business in the EEA. Whether firms need regulatory permissions to continue to do business in an EEA country will depend on the activity they are carrying on, the local law and the approach of the local authorities in that jurisdiction.

With the 31 October deadline approaching fast the UK regulator has increased its efforts signposting - digital adverts - its Brexit advice

 The FCA is urging all firms to consider the implications of a no-deal exit and is particularly relevant for firms that:

  • are a UK business which does any business in the EEA
  • passport into the UK and have not notified the FCA for entry into the Temporary Permissions Regime
  • have consumers in the EEA
  • transfer personal data from the EEA

    Nausicaa Delfas, Executive Director of International at the Financial Conduct Authority said:

    'The FCA has undertaken significant work to prepare for the UK’s departure from the EU. We have published extensive information on our Brexit pages and held events, reaching firms and trade organisations around the country.

    'We expect firms to ensure they are ready if there is a no-deal. If firms haven’t finalised their preparations, there is a risk they could be impacted. Firms should consult the information on our website."

4. UK – AltFi

AltFi runs an opinion piece expressing disappointment about the state of open banking.

“When the Competition and Markets Authority introduced open banking over 18 months ago, it was hailed to be a revolutionary development for the consumer, breaking the data advantage enjoyed by the big banks and catalysing innovation.

However, the reality is adoption has been underwhelming. This is largely down to the lack of awareness and understanding around what open banking is. In fact, research has shown that 75% of consumers are unaware of open banking and are highly sceptical about sharing their data; unsurprising in an environment where data breaches and shaky technological infrastructure regularly hit the headlines.

Slow implementation of the technology by high street banks owing to outdated infrastructure is certainly part of the explanation too. Open banking allows the sharing of data with a range of financial service providers. But in many cases, for this to work, it requires banks to update their data platforms and interfaces. And this, of course, means the investment of both time and money – something that banks don’t want to do if the uptake from consumers is poor.

It’s a catch twenty-two. Consumers don’t understand enough about the technology to adopt it, so banks don’t want to waste their time making their systems work for it. So the biggest household names are not widely associated with open banking initiatives.

Another crucial factor is open banking offers few advantages to traditional banks and so consumers who embrace open banking might look elsewhere for services that large retail banks have historically provided.”

5. UK – P2P

Crowdfund insider reports:

“Leading UK Fintech and online mortgage provider LendInvest has joined MCI Mortgage Club’s lender panel. The move was said to be driven by the desire to offer the company’s Buy-to-Let mortgage products to a wider audience of brokers. Mortgage Club members will now have access to LendInvest’s “BTL platform” where applicants can receive “instant decisions” and faster turnaround times to receiving money.

LendInvest notes that recently the company made some changes to its BTL products, including introducing additional products at 65% and 70% LTV and a cashback contribution for legal fees on its 75% LTV 5 year fixed rate products.”