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Wednesday 29th May 2024, 2:00 PM (BST)

Time is right for SMEs to borrow, says Deloitte report

Because of what Deloitte describes as a “borrower-friendly market”, the Big 4 firm says that SMEs should consider taking loans out now to fund expansion plans.

As credit availability rises to a near seven-year high while the cost of credit falls towards an eight-year low, the UK banking market is “buoyant”, according to the company's latest analysis.

Window of opportunity

Citing the current UK economic situation as a "window of opportunity” for small business, the firm says that there are plenty of opportunities for companies to seek out and find competitive funding packages to back up growth plans.

Deloitte director of commercial refinancing, Ravi Sharma, said: “The market has been spurred on by the European Central Bank injecting unprecedented levels of liquidity in the form of quantitative easing.

“This, combined with increasing levels of competition in the debt markets, with High Street lenders focused on growth, and the continual growth of the asset-based lending (ABL) market, is creating a favourable market for lending," he explained.

New methods

Sharma also highlighted the impact of new forms of borrowing that are very different from the traditional bank-funded loans. Structures such as uni-tranche, peer to peer lending and single-invoice finance methods are now competitive and readily available.

Also, the current global market situation also plays a significant part, as Sharma pointed out.

"We are now seeing a market where the cost of credit in Europe is lower than the USA, which is a significant change in historical trends,” he said.

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