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New finance advice is good news

A Shropshire accountant says new guidance to help small businesses raise vital cash is great news for the local economy.

Keith Winter, of Dyke Yaxley Chartered Accountants, in Shrewsbury, said the new advice tackled the difficult issue of finding alternative funding rather than taking the more usual route of approaching a bank.

"It's specifically targeted at start-ups and small businesses, and in Shropshire, they make up a large portion of the local economy."

"This will make a huge difference in such troubling economic times, as it gives people options that they may never have considered previously."

The free digital guide has been produced by Smallbusiness.co.uk and explains to entrepreneurs and small business owners how they can access new online sources of finance such as crowdfunding and peer-to-peer lending.

"Both these sources have become increasingly popular as small businesses continue to struggle to secure finance from high street banks after the recession," said Keith.

In the guide, the benefits of each platform are discussed with case studies included, and it also offers advice on how to put together a successful funding application.

"The new sources are accessed through the internet, and they allow businesses to take loans directly from both individual and institutional investors, without the need to go through a traditional bank."

"Borrowers usually are given the choice of giving away a stake in their business in exchange for investment, or they can take out a standard loan.

"This new approach means accessing finance is actually a reality once again for SMEs and entrepreneurs, which can only be good news for the entire local economy."

In peer-to-peer lending, private investors receive high returns while businesses get low cost finance, often at much more competitive rates than from high street banks.

And crowdfunding offers both equity finance and debt finance, where businesses can accept multiple loans from "armchair" lenders.

Dyke Yaxley's Keith Winter