# The Emerging Growth of Specialist Finance in the UK
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-10-27
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Specialist Finance in the UK: Growing Trends & Options
Meta Description: Discover the world of specialist finance in the UK - from bridging to development funding. Find out why it's gaining popularity and how it can benefit you.
URL: https://financedigest.com/the-emerging-growth-of-specialist-finance-in-the-ukhtml

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Specialist finance is an increasingly exciting area of borrowing and money lending that is growing rapidly in the UK.

This refers to any type of non-bank financing and ways of raising money without going to a traditional high street – but rather a private institution, challenger bank or tech company.

Specialist finance is commonly used today for funding businesses, buying property and offering short term finance to borrowers.

To give an indication of growth, the bridging finance industry (a perfect example of specialist finance) was worth £1 billion in 2011 and [ten years later is valued at £7 billion](https://www.mt-finance.com/bridging-finance-industry-worth/). Another specialist finance player in Zopa, completed its IPO last week at a [valuation of £1 billion](https://www.financedigest.com/allianz-puts-n26-stake-up-for-sale-at-3-billion-valuation-ft.html "Allianz puts N26 stake up for sale at  billion valuation – FT").

The trend is real – from consumers moving from Santander to Starling Bank and Metro Bank to Monzo – we delve a little deeper to find out what specialist finance is, why people use it and what are the [types available to you and your business](https://www.financedigest.com/types-of-business-loans.html "Types of business loans").

**What is** [Specialist Finance?](https://www.financedigest.com/leading-global-trade-finance-specialist-becomes-adviser-to-gfg-alliance-firm-wyelands-capital.html "Leading global trade finance specialist becomes adviser to GFG Alliance firm, Wyelands Capital")

Specialist [finance largely refers to any type of funding or finance which is not from a bank](https://www.financedigest.com/why-finance-professionals-must-bank-on-a-journey-to-the-cloud.html "Why finance professionals must bank on a journey to the cloud"). Whilst your high street bank used to be your first port of call for any type of loan, bank account or savings account, the [British consumer is adopting more alternative companies and this includes startups](https://www.financedigest.com/germanys-biontech-buys-british-ai-startup-instadeep.html "Germany’s BioNTech buys British AI startup InstaDeep") and tech companies.

In many cases, specialist finance companies can offer more incentives for signing up, such as welcome bonuses and offers for free – and more innovation and tech in terms of budgeting, saving [money or getting faster access to finance](https://www.financedigest.com/student-finances-exposed-how-do-they-really-spend-their-money.html "Student finances exposed: How do they really spend their money?").

Specialist finance includes but is not limited to bridging, development finance, mezzanine funding, senior debt, [peer to peer lending](https://fundourselves.com/), invoice factoring and more.

**Why is Specialist Finance** [Becoming So Popular?](https://www.financedigest.com/poplar-becoming-more-popular-than-hip-neighbouring-shoreditch.html "Poplar becoming more popular than hip neighbouring Shoreditch")

The [turning point for specialist finance](https://www.financedigest.com/how-finance-leaders-can-turn-the-inflation-challenge-into-opportunity.html "How finance leaders can turn the inflation challenge into opportunity") was an outcome of the financial credit crisis in 2008. From this point, mainstream banks became very restrictive in terms of who they lent [money to – from businesses](https://www.financedigest.com/breaking-down-the-barriers-of-ar-automation-to-help-businesses-save-money.html "Breaking down the barriers of AR automation to help businesses save money ") to regular joes on the street looking to get a mortgage.

The [process of getting approved](https://www.financedigest.com/emvco-streamlines-approval-process-for-mobile-payment-devices.html "EMVCo Streamlines Approval Process for Mobile Payment Devices") for a loan or mortgage has become far more difficult and this remains the case today.

This has given rise to specialist finance which are likely to be run by more forward-thinking entrepreneurs who can offer strong USPs and are more likely to take a view on individuals, small businesses and more individual circumstances such as being self-employed or with [bad credit](https://www.financedigest.com/4-ways-to-get-a-bad-credit-loan.html "4 Ways to Get a Bad Credit Loan") ratings.

**What Are The Types of Specialist Finance for …**

[**Buying Property**](https://www.financedigest.com/the-true-cost-of-buy-to-let-property.html "The true cost of buy to let property")

Bridging finance is one of the fastest growing [areas](https://www.financedigest.com/4-areas-of-finance-you-should-be-watching.html "4 Areas of Finance You Should Be Watching") of specialist finance which allows people to borrow money to purchase a property under a tight deadline. Whilst the property is used as security, bridging finance allows you to [become a cash buyer and complete the sale of the property](https://www.financedigest.com/property-letting-could-become-a-legal-minefield.html "PROPERTY LETTING COULD BECOME A LEGAL MINEFIELD") immediately. Most bridging loans are completed within 2 to 4 weeks, with the [option to repay over 3 to 24 months – hence this type of finance](https://www.financedigest.com/7-finance-career-options-to-consider-and-what-you-need-to-know-about-each.html "7 Finance Career Options to Consider and What You Need to Know About Each") is usually short term.

Similar options are available to help people complete on properties, whether it is for [personal or investment](https://www.financedigest.com/personal-finance-strategies-for-saving-and-investing.html "Personal finance: strategies for saving and investing") purposes. This included development finance which is used to [buy plots of land and the construction costs](https://www.financedigest.com/blessing-or-burden-what-else-could-you-buy-for-the-cost-of-your-timeshare.html "Blessing or burden? What else could you buy for the cost of your timeshare?") associated with them. There is also [mezzanine finance](https://octagoncapital.co.uk/mezzanine-finance/) and senior debt, which allows you to borrow money for more high-risk projects, whilst giving a small percentage to the lender too.

**For Startups**

Specialist finance exists in many forms for startups – whether it is using crowdfunding platforms, challenger [banks or asset backed](https://www.financedigest.com/bank-of-englands-mann-doubles-down-on-backing-for-rate-hikes.html "Bank of England’s Mann doubles down on backing for rate hikes") lending.

For many startups, a specialist [finance lender can offer a lot of advantages](https://www.financedigest.com/integrated-finance-the-advantages-of-using-financial-infrastructure-as-a-service.html "Integrated Finance: the advantages of using financial-infrastructure-as-a-service") over a bank. With traditional banks likely to be more restrictive, a specialist [firm can be more open to working](https://www.financedigest.com/turning-a-blind-eye-wont-work-for-financial-firms-as-the-fca-tightens-its-grip.html "TURNING A BLIND EYE WON’T WORK FOR FINANCIAL FIRMS AS THE FCA TIGHTENS ITS GRIP") with new companies and offer loans using security, future invoices, purchase orders and more.

Above all, specialist companies will take a view on individuals regardless of their history or background, looking at the particular opportunity and its potential.

**For** [Working Capital](https://www.financedigest.com/the-evolving-world-of-trade-finance-optimize-working-capital-with-distributed-ledgers.html "The Evolving World Of Trade Finance: Optimize Working Capital With Distributed Ledgers")

Working capital is key for many businesses that suffer with cash flow [issues and need money](https://www.financedigest.com/more-than-one-in-ten-brits-are-embarrassed-to-talk-to-anyone-about-their-money-issues.html "More than one in ten Brits are embarrassed to talk to anyone about their money issues") upfront to keep their business running.

Invoice finance is commonly used by caterers, food stockists, fashion companies and those selling high volumes of goods, since it allows them to receive money upfront on unpaid invoices. With up to 80% available upfront, this can be used for paying for stock, hiring staff and completing any jobs until the invoice is eventually paid to you in full.

Similarly, construction [finance is a type of specialist finance used for construction firms](https://www.financedigest.com/finance-firms-must-ensure-they-fix-data-fundamentals.html "Finance firms must ensure they fix data fundamentals") who may get paid 50% upfront and then 50% upon completion. The [role of finance](https://www.financedigest.com/theres-nothing-artificial-about-the-role-of-ai-and-data-in-the-finance-industry.html "There’s nothing artificial about the role of AI and data in the finance industry ") can help pay for any working capital, materials and expertise to complete the job and stay on top of cash flow.

**This is a Sponsored Feature.**


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