ALTERNATIVE lenders helped drive £678m of new funding commitments through British Business Bank (BBB) programmes in 2017/18, taking the total stock of finance provided to small businesses to £12.3bn.
This represents an increase of 33 per cent from the year before, according to the economic development bank’s latest annual report.
Overall, 74,000 small- and medium-sized enterprises (SMEs) now receive a loan or investment through BBB programmes.
The BBB said the increase in financing was driven primarily by the strong performance of the Investment Programme and Business Finance Partnership, both of which provide funding through peer-to-peer lending platforms alongside other investments.
Almost 96 per cent of the support offered to small businesses was delivered through smaller, newer or alternative finance providers, up from 94 per cent two years ago.
“Diversity of finance options can improve access to finance for a wider range of businesses and improve the terms and ease of use of finance for small businesses,” the BBB’s annual report states.
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The government-owned bank said lending volumes in the UK stayed relatively flat in 2017, while other forms of debt finance such as asset finance and peer-to-peer lending grew significantly.
Half of the SMEs surveyed said they were aware of the various finance options available, including peer-to-peer lending, crowdfunding, leasing, venture capital, business angels and mezzanine finance.
Keith Morgan, chief executive of the BBB, said businesses at all stages – whether start-ups, scale-ups or well-established firms – need the right sort of finance to realise their potential.
“The gearing up of our delivery and capability in the last year means we are ready and able to support more businesses across the UK in the future, whatever opportunities and challenges may lie ahead,” he said.
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