Finance Monthly December 2019 Edition

created uncertainty for managers (and the Alternative Credit Council has suggested that this should be amended). Italy is faced with a number of barriers too - non- EU Alternative Investment Funds (AIFs) are restricted from lending into Italy under national law. The weaker outlook, both economically and for the capital markets, is making investors concerned about the prospects for businesses, which in turn is holding back their commitments. Another option for SMEs is private debt funds. Global funds raised to invest in private debt have been accelerating - in 2017, they increased by 10% to more than $100 billion (£80bn) and this pace of growth has continued in Europe (up 26%) and in Asia. 14 Last year, BNP Paribas Asset Management expanded its private debt range with the launch of a UK SME Debt fund, offering investors access to the lending market for small and medium UK businesses 15 . However, for SMEs, debt funds can be expensive with regard to the fees and interest rates they charge and the fact that they typically focus on medium-sized and larger companies so earlier-stage business would likely struggle to secure funding from these funds. Asset-based finance including factoring likely offers the best solution An option that is worth considering is ABF. Today, the industry is a sophisticated transactional business funding model, For SMEs, debt funds can be expensive with regard to the fees and interest rates they charge and the fact that they typically focus on medium-sized and larger companies. “ “ 20 www.finance-monthly.com FINANCE & BUSINESS - ECONOMIC DOWNTURN IN EUROPE