There’s much to look back on and celebrate in alternative finance.
In 2019, the number of leases and loans being taken out by businesses from untraditional sources was already predicted to grow 20.64% on the year before. And the UK is still Europe’s largest P2P lending market.
From our perspective as brokers, the last 12 months have proven that anyone can do anything with a specialist’s confidence behind them. But which industries are the healthiest and doing the most with alt finance? Let’s take a look…
Construction
With innovative new technologies such as modular development guiding the industry, construction output was very healthy in 2019. Fintech Finance reports that 30,000 new businesses were formed between 2016 and 2018: a 10% increase. In fact, 12.4% of all startup businesses in the UK were in the construction sector. Alternative finance helped fund some of these projects and the diverse tools they rely on.
Food and drink
For several years now, big British restaurant chains have been feeling the squeeze from a middle market that no longer exists. Customers are willing to pay more for a high-end, quality experience, or stick to a budget meal – there’s increasingly less space between. That’s why alternative lenders have funded more and more startups and local concepts, which can thrive on innovation. Johnson Reed have personally helped in the funding of many new hospitality projects, such as It’s The Juice Life and Richardson’s Fish Bar.
Manufacturing
Brexit has thrown many challenges at British business – but also some clear opportunities. One of these has been the resurgence in UK-based manufacturing; in the words of the Finance & Leasing Association’s Geraldine Kilkelly, it’s a direct effect of the tariffs that will likely be enforced post-Brexit. Plants, factories and warehouses have been enjoying more success than usual. £623 million worth of equipment was funded in September 2019 alone.
Marketing and advertising
Another big revelation from Fintech Finance was just how much new business has been created in the marketing industry. At the start of 2019, we witnessed the 21st consecutive quarter period of growth. Ad spends were already £5.6 billion by Q3 2018; the continued rise is astonishing. Social media, web design, video, copywriting and analytics software are becoming more necessary to players in saturated markets. Loans have been increasing to meet demand, as alternative lenders know the value of a short-term cash injection.
Fitness
Gym and health club memberships are everywhere now – wellbeing is far up the list of the UK consumer’s priorities when it comes to spending their surplus cash. The stats speak for themselves. Overall, the fitness sector was valued at £5.1 billion last year: 4.2% higher than 2018. Investors like the quick, profitable pace of a gym site in a top location, with a model that can be rolled out around the country. Suppliers, too, are tightening their ties to alternative lending. Our work with InBody has allowed hundreds of Personal Trainers to stay competitive with new equipment.
We want to give 2020 even more of a push in the right direction… Get in touch with a member of the Johnson Reed team to access common-sense lending, whatever industry you’re involved with. One agreement could open up new avenues to profit and smoother cash flow management.
