The Small Business Association (SBA) is continuing to lobby policymakers to consider the provision of grants and stimulus support to firms, especially given the impact of the COVID-19 pandemic on the sector.
The SBA maintains that traditional forms of funding will no longer be the viable option to sustain the micro, small and medium-sized enterprises (MSME) sector going forward.
“The Small Business Association is fully aware that access to financing in the region has been one of the major impediments to growth for small businesses. As a result, the association has lobbied and encouraged policymakers to consider the provision of grants and stimulus support to firms, especially in this COVID-19 environment,” the SBA said in this month’s newsletter.
“However, the association believes that traditional forms of financing can no longer sustain the sector going forward and alternative sources of funding solutions must be explored,” it added.
It was with this in mind that the SBA hosted a recent webinar entitled Developing a Framework for Alternative Financing for MSMEs.
The online event was designed primarily to help members understand what the various alternative financial solutions look like.
Financial Advisory Director of Deloitte Raymond Haynes, defined alternative financing as forms of finance that were outside the traditional finance system of banking.
He said these forms of financing generally fell into three main brackets – equity, debt and award.
In his presentation, he gave a brief overview of the financing options, pointing out that for equity financing, this was a process of raising capital through the sale of shares or stock of the company.
He explained that angel financing was where a high net-worth individual or group provides capital in exchange for ownership equity while crowdfunding was one in which funding was obtained from contributions made by a large group of people and peer-to-peer lending, which was a form of crowdfunding, is typically debt-based but may also be equity based and allows one or more individual to lend money directly to those who need it. (PR)
