New service helps SMEs starved of funding by the big banks

Whether Project Merlin waves its magic wand remains to be seen, but either way it does not alter the fact that historically small and medium size businesses have always found themselves beholden to the major banks, who charge them high fees and high interest rates when they want to borrow. The problem is exacerbated by a lack of providers to choose from, and thus borrowers continually discover that they have very limited funding options, particularly since they don't have access to the markets available to the large blue chip companies. The reality is that, in the UK, small and medium-sized businesses employ 60% of the private sector workforce and provide 50% of all wealth creation. They are the vital lifeblood of the UK economy, and as such it is imperative that they are supported financially, with the best and most competitive terms and rates.

The good news is that there is now a panacea to the lending problems and issues faced by the small and medium-sized business. The recently launched YouAngel website is a business-funding marketplace that uses the power of the internet to bring borrowers and lenders together, cutting out the need for SMEs to approach any of the big banks.

YouAngel is an internet-based social lending community, sometimes referred to as peer-to-peer (P2P) lending. YouAngel acts as a marketplace giving the small business direct access to private and individual lenders who are looking for a fair return on their money. This way the SME is not subject to the banks' higher overheads and is thus able to get a lower rate. In addition, with exposure to a larger number of lenders, the borrower can negotiate the best deal available.

An added benefit is that YouAngel is a community of business lending that enables synergies above and beyond the obvious financial advantages. Martin Wright, CEO of YouAngel, explains:

"YouAngel is about more than just cheaper finance, although that is an important benefit. At YouAngel, borrowers are also able to tap into the added value of the lending community. In essence, the website has an added dimension and facet as a business networking platform, where participants can exchange ideas and business contacts".

He continues: "Imagine that your company was looking for a distributor or manufacturing partner. By borrowing from a large number of lenders, the chances are pretty good that one of them would know someone suitable. Maybe they have even lent to just such a distributor or manufacturing partner at YouAngel. This is the sort of synergy and added-value that makes YouAngel better business as well as better finance, and which over time turns the lending community into a fabulous asset that can give borrowers a competitive advantage".

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