So, now I’m two months into my role at Platform Black and enjoying every minute of being part of a vibrant and record breaking ‘alternative’ finance team. However, it has occurred to me again and again that the term ‘alternative’ is something that doesn’t sit well, as it often carries negative connotations which are misleading and inaccurate. The emergence of platforms such as Platform Black has given rise to a complementary source of finance that can sit comfortably alongside other mainstream sources. It is, as I wrote in my last blog, complementary and not disruptive.
In all areas of life the term alternative is used and often not in the most positive way: we have all heard of people who dress differently being called ‘alternative’, rather than individual or having a cutting edge fashion sense. People who have tattoos or multiple piercings are often judged negatively because of their ‘alternative’ appearance rather than being accepted as any other individual would be, based on their personality and individuality. New areas of therapy are called ‘alternative’ and treated with suspicion by many despite often helping where traditional medicine has been unable to. It seems to be a common trait to be wary of change and of difference - wary of ‘alternative’ - however in time these new fashions, treatments and new technologies gradually become accepted and become mainstream.
When I started out in the invoice finance world back in the late 80s, factoring was almost a dirty word and factors were classed as being lenders of last resort – it was most definitely ‘alternative’ – now, it is mainstream. Companies were dubious of using a factor as it could make other businesses believe they were in financial difficulty. We have all worked hard as a sector to change this perception and educate about the positives of a facility that is a superb cashflow tool for growing businesses. Over the years perception has changed and invoice finance has become a widely accepted and respected form of finance. It is interesting to note here that over time most of the invoice finance providers gradually moved away from having factor in their business name because of the negative connotations. Most have moved over to the now widely used term of invoice finance – and I wonder whether we need to be thinking the same way about the term ‘alternative’.
Of course, there are negatives and positives with all new developments – the internet has brought new opportunity and knowledge accessible to millions and it has made the world a smaller place; however, as we are all too aware, it has also brought with it some serious negative sides – but is that a reason not to embrace new technologies and ways of working? No – because the benefits outstrip any negatives, we just all have a responsibility to try and keep the positives outweighing the negatives.
The rise of ‘alternative’ finance is, in the main, a hugely exciting development in funding and should continue to be so. However we all have a requirement to lend responsibly, be transparent in our charges, communicate well and deliver quick decisions.
At Platform Black this is how we work. Every question I have on underwriting is answered as I would have expected it to be answered in the ‘mainstream’ invoice finance world - with the knowledge gained from many years working in this sector. Our clients come back month after month because it works for their business and our funders come back because they get repaid.
I hope I read this blog back in a few years and see that todays ‘alternative’ finance sector has become mainstream, widely respected and perhaps called ‘complementary’ finance, in the same way that some alternative therapies are now regarded as complementary therapies.