SMEs continue to hunt for credit
Small and medium-sized enterprises (SMEs) have found it notoriously difficult to obtain secure funding during the downturn with a trend of the banks refusing to lend. The Bank of England’s April 2014 ‘Trends in Lending’ report showed overall lending to UK businesses was down by 2.1 per cent from a year ago.
The recently published ‘Trends in Lending Report’ in July 2014 showed some improvement, with a positive net rise of £235m in lending to SMEs in June 2014. However, it also revealed a £3.45bn net fall in overall bank lending to non-financial businesses in the UK, leaving many SMEs in serious financial difficulties.
The problems with bank finance have led to a rise in alternative lending. Money provided to smaller firms by alternative online funders rose from £318m by last September to £852.5m by June 2014. It is expected to reach more than £1bn in August this year, according to finance firm Fleximize (launched in January 2014 offering loans and revenue-based finance to UK businesses). It estimates that, during the period, the amount of funding provided rose by about 11.7 per cent a month, equivalent to about £2.2m per day…
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