As UK bank loans decline, asset lending can help struggling businesses

The Bank of England recently released a report about lending, and any hope that the Funding for Lending Scheme (FLS) was on the verge of picking up was shattered.

After modest increases in August and September, net short term lending declined again, according to the report.

"It is pretty clear that the FLS is not living up to expectations," said Michael Saunders, chief UK economist at Citi. "The limited impact from the FLS raises the likelihood of other forms of easing and additional credit easing in our view."

If the FLS initiative eventually succeeds, it likely won't pick up for the foreseeable future. In the meantime, small and medium-sized businesses in the United Kingdom are in need of some funds - which is where alternative short term lenders can fund struggling businesses.

In a recent blog post for Dynamic Business, Assetline co-founder Nick Raphaely discussed the benefits of asset lending, which is rapidly gaining popularity in both the U.K. and the United States. If a company is strapped for cash, bank loans are less than ideal as they tend to take longer to go through and aren't nearly the guarantees they used to be.

Asset lending, on the other hand, is a relatively easy process. According to Raphaely, business owners can apply for funds online by offering valuable assets as collateral. Then, a valuation team will determine how much those assets are worth - for example, jewelry or antiques - before deciding on a short-term loan figure. In most cases, businesses can receive asset loans within a few days.

Another advantage of these methods is that they are extremely flexible. They are available for essentially any dollar amount, so business owners can use them for anything from paying late bills to a down payment for a new office building.