Alternative finance for UK businesses.

JPM Capital endeavours to provide timely and appropriate solutions to all of our clients funding needs.

Alternative
Finance

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What is alternative finance?

Alternative finance is a broad term that is used to describe business funding options that are not provided by traditional lenders, such as a high street bank or government scheme. There are alternative funding products that are the same but are not from bank or government facilities.

Alternative finance can be provided by alternative lenders and brokers. Sometimes the lenders will only provide specialist financing products such as VAT funding or invoice financing.

alternative finance

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How does alternative finance work?

Alternative finance works depending on the product that the business applies for. There are many different products that provide different financial services, therefore it is important to research the marketplace to find the right option for your business.

Alternative finance is typically provided by alternative lenders, which can usually be found on online marketplaces. It is important that businesses check that the alternative finance provider is authorised and regulated by the Financial Conduct Authority. Ensuring that a business is on the FCA shows that the business is more trusted.

Typical places to find alternative finance products include online marketplaces, lenders and commercial credit brokerages.

What can alternative finance be used for?

Alternative finance is typically used to help businesses raise the finance that they need. It is down to the discretion of the business to choose what they spend their alternative finance on unless stated otherwise in the credit contract.

Popular uses of alternative finance include:

  • Improving cash flow.
  • Making payments
  • Investing in company projects
  • Hiring new staff
  • Accessing new equipment.

Why do businesses apply for alternative finance?

Businesses apply for alternative finance for a number of reasons. Many businesses will often seek out alternative finance products due to the strict criteria required by traditional lenders. The criteria of traditional lenders can often exclude certain business types, such as sole traders, small businesses, and startup businesses, from seeking the finance they need to help improve.

Alternative finance products can often be innovative and help businesses with raising the finance they need to function successfully. In addition, the application for alternative business lending is usually much simpler than traditional lending. Traditional lenders can often be a lengthy process, which is not ideal for businesses seeking urgent cash injections.


What types of alternative finance are available?

Interest-only loans

Interest-only business loans are designed for businesses that do not want to attach collateral to their finance. These are typically for small businesses that may not have assets that can cover the cost of a loan.

Merchant cash advance (MCA)

A merchant cash advance, sometimes known as card terminal funding, is a way for businesses that receive credit or debit card payments to borrow money. The way it works is that a lender loans the business money, the lender then receives a percentage of the business’ card payments in return. 

This is useful for businesses that do not have many assets, such as sole traders and startups but receive a lot of revenue via card terminals. With a merchant cash advance, there are no fixed monthly payments or interest, simply a fixed fee and a percentage taken from all card payments until the loan is repaid.

Sharia-compliant finance

Sharia-compliant finance is a form of funding that is compliant with Sharia law and Islamic economics. Some of the key practices of Sharia-compliant finance include:

  • No interest rates are charged on financial products.
  • The business cannot benefit from Haram practices such as gambling or alcohol.
  • No high-risk or speculative investments.

Sharia-compliant finance has a large market in the UK and anybody can apply for Sharia-compliant finance.

Revolving credit facilities

A revolving credit facility is a form of business credit that allows businesses to withdraw money and fund business ventures, and then repay it and use it again when needed. 

A revolving credit limit will be agreed with the lender and the business chooses how much they wish to borrow from the facility. The credit is withdrawn and transferred directly into the business bank account. The business then repays the borrowed money and accrued interest over a period that suits them. Importantly, interest is only charged on the amount of money a business borrows.

When the borrowed money and interest are fully repaid, the business is free to withdraw from the credit facility again.

Second charge loan facilities

A second charge loan facility is essentially a secured business loan. It allows a business owner to use property, even if it already has an existing mortgage, as security on a separate loan. Businesses that find it difficult to secure funding may choose to use a second charge loan facility to help with the investment of their business. 

Stock loans

Stock loans, sometimes known as inventory financing, is where equity that is tied up within inventory is then released into a short-term loan. The loan is then repaid as stock is sold. This type of business loan is utilised by retailers, manufacturers and wholesalers who naturally have lots of stock held in warehouses.

Asset refinance

Asset refinance is the process of releasing equity funds from assets that a business already owns. An asset refinance lender will lend money up to what the asset is worth, once refinanced, the asset becomes property of the lender. The business will then repay the lender over a period of months, once the repayment is made in full, the asset becomes the property of the business again.

It is a quick way for a business to release equity on owned assets, which can then be invested back into the business.


What are the benefits of alternative finance?

Faster

Alternative finance is usually a much faster process than traditional financing. In many cases, funding can be accessed by businesses within 48 hours of applications being accepted, which is useful for businesses seeking urgent investment.

Simple Criteria

Many traditional lenders will often have very high criteria that need to be met before businesses qualify for funding. This can often exclude many businesses that apply for funding. Alternative funding is designed to be accessible, especially for startups and sole traders that can find it difficult to secure funding.

Greater variety of products

There are many finance providers on the market, with innovative products being created. This means that a business will be able to find a financial option that is better suited to the needs of their business. Using a commercial credit brokerage allows businesses to find the right funding.


How can I apply for alternative financing?

To apply for alternative finance you can speak to one of our account managers by calling 01244 207276. By speaking to our account managers, we will be able to provide an honest assessment of your business and see if there is a solution for your alternative business funding needs.

You can also apply for alternative financing by completing the online contact which is found at the bottom of the page. Once completed and submitted, one of our team will be in touch to discuss your business needs.

What are alternative funding solutions can JPM Capital provide?

  • Flexible drawdown loans (much like a flexible overdraft).
  • Interest Only Loans – for periods up to 12 months.
  • 3 months instalment free solutions.
  • Bad credit and new start funding solutions.
  • Personal Loans (up to £50k).
  • Unsecured funding without Directors’ Personal Guarantee
  • An Experienced and dedicated broker can discuss all available options.
  • Quick decision, normally within 24 hours.
  • Separate from existing bank facilities.

Why should I apply for alternative finance with JPM Capital?

JPM has partnered with the UK’s leading funding providers on the alternative finance market. As a commercial finance brokerage, we help businesses find the funding solutions they need to help their business grow. We work with a number of partners which allows us to broker a variety of finance options to small and medium-sized businesses in the UK. 

JPM Capital is also authorised and regulated by the Financial Conduct Authority, meaning that as a credit brokerage we adhere to the strictest compliance protocols and are a trusted financial service. 

Furthermore, we are also a member of the National Association of Commercial Finance Brokers (NACFB). As a member of NACFB, we stay up to date with the latest developments in the finance industry which helps us provide an even better service to our clients.

Can JPM Capital broker other financial products?

Yes, JPM Capital can broker other financial products. JPM Capital works with a number of different partners which allows us to broker a variety of financial products to businesses in the UK. Other products that we can broker include:

To contact us about any of our funding options listed above, please call us at 01244 207276 or by filling out the quote form at the bottom of the page.

Paul is calm, thoughtful and positive during a period where so many businesses are in panic. I am thankful for his and JPM's continued support and will continue to recommend clients in need to Paul.
Accountants - Glasgow
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