Small business lending soars by 30% to record £20.7bn
However, lending growth in the alternative finance sector has slowed down to 14.4% at £725m
Lending to small businesses reached an all-time high over the last 12 months, rising by 29.8% to £20.7bn, according to the latest annual figures from the National Association of Commercial Finance Brokers (NACFB).
Despite economic uncertainty surrounding the European referendum, the last year saw small business lending exceed its pre-recession peak of 2007 and was the seventh consecutive year of total lending growth.
Commercial mortgages alone rose by 54.8% to £5.3bn and have more than doubled from £2.23bn in 2014. This is thought to be due to an increased appetite from traditional high street lenders and the wider range of deals on offer.
Over the same period, invoice finance has risen by 22.8%, leasing & equipment finance by 10.5%, development finance by 49.8% and bridging finance by 74.6%. Buy-to-let witnessed 39.1% growth to £5bn over the last 12 months despite the stamp duty hike.
However, growth in the alternative finance sector has slowed. Lending such as peer-to-peer and crowdfunding written by NACFB brokers has dropped by 14.4%, down from £848m to £725m.
Adam Tyler, chief executive at NACFB, commented: “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.”