Lending to small businesses grows for seventh consecutive year

Lending to small businesses has increased by almost 30% (29.8%) to £20.7bn - an all-time high - in the past 12 months, according to the National Association of Commercial Finance Brokers latest annual figures.

Related topics:  Commercial,  Commercial finance
Amy Loddington
13th September 2016
coins money

The figures are based on business written by NACFB brokers between July 2015 and June 2016. Over the past year, lending to SMEs has exceeded the pre-recession high of 2007.

It’s also the seventh consecutive year that total lending to small businesses has grown.

However, while traditional forms of lending, such as commercial mortgages, has had an impressive 12 months, with business written over £5.3 billion, up 54.8% on last year, lending in the alternative finance space, which includes peer-to-peer and crowdfunding, has slowed. Business written by NACFB brokers over the past 12 months has fallen by 14.4%, down from £848 million to £725 million.

The commercial mortgage business has benefited from renewed confidence in longer term lending, with a wider range of deals to choose from and an increased appetite from the traditional high street lenders. Since 2013 commercial mortgage business written by NACFB members has more than doubled, up from £2.23 billion in 2014.

Other areas that have seen strong growth include invoice finance (up 22.8%), leasing & equipment finance (up 10.5%), development finance (up 49.8%) and bridging finance (up 74.6%).

Adam Tyler, comments:

“It’s been a phenomenal and record breaking year across the commercial finance sector. With the UK’s SME community showing a real appetite for growth, despite the uncertainty of Brexit, we have seen small business lending at levels above even those registered before the financial crash.  

“Interestingly, the figures show that there has been a significant switch by small businesses back to traditional forms of lending. The alternative finance sector has grown at such a pace that it was inevitable that rate of growth couldn’t be sustained. Peer-to-peer will always have its place, but alternative forms of funding are no longer the only future; they are just one of many forms of finance available to small and medium sized businesses.

“There has never been a better time for businesses to secure finance, as the commercial finance sector continues to innovate and diversify. The challenge is to make sure the message reaches SMEs that there are many routes to funding.

“Although the NACFB membership is at its highest ever level, there is still a great deal of work to be done to raise the awareness, not just of the NACFB, but of the funding options offered by NACFB broker members. Commercial finance brokers have a crucial role to play in helping SMEs take advantage of the new opportunities available to them, particularly as we look to broker new trade agreements with countries outside the EU.”

More like this
Latest from Property Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.