Small business lending reaches record high, figures show
Lending to small businesses has reached a record high over the past year, according to new figures from the National Association of Commercial Finance Brokers (NACFB).
The figures showed that lending has risen by 30 per cent to a record £20.7 billion, despite the economic uncertainty surrounding the EU referendum. It is the seventh year in a row of growth for lending to small businesses.
Whilst traditional forms of lending have grown over the past year, growth has been slow in the alternative finance sector, with crowdfunding and peer-to-peer lending written by brokers from the NACFB falling by 14.4 per cent from £848 million to £725 million.
The figures showed strong growth in other areas of small business lending. Leasing and equipment finance is up by 10.5 per cent, invoice finance is up by 22.8 per cent, development finance is up by 49.8 per cent and bridging finance is up 74.6 per cent.
Commenting on the figures, NACFB Chief Executive, Adam Tyler, said that they show that there has been a “significant switch” by small businesses to traditional forms of lending.
He stated that the alternative finance sector has grown at such a pace that it was “inevitable” that the rate of growth could not be sustained.
“Peer-to-peer lending 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,” he added.