What to do when the bank says no

Our new guide to alternative finance sets out the different options available to SMEs and how to get started. Here, Anil Stocker our Sage Business Expert, gives an overview of the types of alternative finance on offer for businesses of every size.

Getting a loan from your bank isn’t as easy as it used to be, and the numbers don’t lie – last year, UK businesses paid back £2 billion more than the banks lent out. The unfortunate reality is, promising start-ups and young entrepreneurs aren’t getting the funding they deserve, and that feeling of rejection from having a loan turned down is hard to swallow for any business owner.

All kinds of businesses could benefit from looking beyond their bank for finance. Here are some ways businesses at different lifecycle stages can benefit from alternative finance.


You’ve got the idea, but is it a winner? You’re testing the water, and your business is in its infancy – but without a proven track record, traditional bank funding is almost certainly out the question.

  • Crowfunded Seed Finance is great place to start for any business in its earliest stages of development – there are multiple online platforms that facilitate a ‘crowd’ or pool of investors pledging money to multiple start-up businesses at once.
  • A Startup Loan is government funded scheme designed specifically with budding entrepreneurs in mind – apply online and an advisor will review your application.
  • Don’t be afraid to go to Family and Friends first – whilst everyone wants to ‘do it on their own,’ sometimes using your existing connections can be a good first step.


You’ve got the product, but it’s still evolving based on your experience and feedback. There might be less than ten or so employees in the office, and you’re still trying to get your brand out there.

  • Business Angels are high net worth individuals grouped together by a third party, that collectively invest in promising young businesses in exchange for equity ownership.
  • Equity Crowdfunding and Startup Loans, as listed above, are also completely relevant for start-up stage businesses.

Alternative finance for businessesGrowth

The product is a proven success, and your business is making steady profits. As your strategy evolves, you want to accelerate your growth and expand your staff. Most owners would go to their bank for a bigger overdraft, or maybe ask for a long term loan, but there are better options out there.

  • Peer-to-peer loans are lending transactions based on debt, between individual investors existing businesses. An online marketplace connects the two parties, and you typically receive funding much quicker than traditional bank financing.
  • Online invoice trading uses a peer-to-peer model, with a provider connecting investors and business owners. An online platform allows growing businesses to auction their unpaid investors in return for immediate working capital.
  • Business angels are also a good option for businesses at this stage of development.

Rapid growth and expansion

Your business is thriving and is looking to expand in every direction – there’s no time for slowing down. You’re past the point of angel investors and equity crowdfunding, as your company’s valuation will likely be too high.

  • Online invoice trading and Peer-to-peer loans are still solid options at this chaotic stage – you’re using your assets to improve your cash flow and expand your ledger.
  • Crowdfunded bonds provide a regular return for their investors by lending money to established brands over a set period, usually 3-4 years.


It’s a long time since the seed stage, and your business is at the top of its game. You have vast financial resources and managerial talent, but now you’ve reached a point where it’s time to decide whether to continue the line of rapid growth, or maybe even consider an exit strategy.

  • Online invoice trading, Peer-to-peer loans and Crowdfunded bonds are all applicable at this high level of development. The traditional option would be debt finance, but if you’re finding it tricky to get the bank to understand your needs, it might be worth considering those alternatives.

Sage has partnered with leading alternative finance providers MarketInvoice and Funding Circle to help you access the finance you need.

MarketInvoice funds growing businesses with revenues of over £100,000 by releasing cash tied up in their unpaid invoices. You can access the funds on the same day you sign up. And with Sage 50 Accounts it’s even easier to use, as you can connect your software with MarketInvoice. Find out more about accessing finance with MarketInvoice

Funding Circle is the world’s leading online marketplace for business loans. Funding Circle can give your business access to growth capital between £5,000 and £1 million, payable over terms of up to five years. It can take as little as one week for funds to reach your business bank account. The Funding Circle marketplace has already connected more than 8,000 small businesses with investors, facilitating £700 million in loans to British businesses since 2010.Find out more about accessing finance with Funding Circle

Anil Stocker

Anil Stocker

Anil is the co-founder of MarketInvoice, an alternative to traditional bank products. At the forefront of a revolution in small business lending, it provides online invoice finance for SMEs. Since launching in 2011 it’s channelled over £300 million to UK SMEs. Anil has a background in private equity, working first with the Lehman Brothers Private Equity Group, and subsequently the investment bank Cogent Partners.