NACFB: Small enterprise lending sees 30% increase
Small business lending increased by almost 30% over the last 12 months despite economic uncertainty cause by the EU referendum, figures from the National Association of Commercial Finance Brokers have revealed.
Lending to small enterprises hit an all-time high of £20.7bn, according to figures collected by the NACFB between July 2015 and June 2016.
Over the past year, lending to SMEs has exceeded the pre-recession high of 2007.
Traditional forms of lending, such as commercial mortgages, have seen a year-on-year increase of 54.8%. Areas of alternative finance have seen a considerable slowdown, with the amount of business written by NACFB brokers over the past 12 months falling by 14.4%, down from £848m to £725m.
Adam Tyler, chief executive of the National Association of Commercial Finance Brokers, said: “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.”
Commercial mortgage business has seen 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 £2.23bn in 2014.
Buy-to-let business has increased by £5bn year-on-year – an increase of more than a third.
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%).
Tyler added: “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.”