LEEDS has been named as the number one location when it comes to firms seeking alternative finance.
Analysis of credit reference agency data as well as figures from the British Business Bank by peer-to-peer lender ThinCats, found that Leeds-based businesses have been quicker to use new sources of finance to fund their growth plans than every other major city in the UK.
Before the 2008 financial crisis, three-quarters of Leeds’ small– and medium-sized enterprise (SMEs) loans were sourced through banks.
This figure has come down to 40 per cent more recently, which compares with a UK average of 57 per cent.
ThinCats said it has identified around 2,700 SMEs in Leeds where it could provide funding. This may be used to expand their teams, to help service new contracts or to invest in new equipment.
“We analysed more than 200,000 businesses across the UK and found Leeds businesses have been very astute and innovative in funding around 60 per cent of their loans through non-bank sources,” Ben Kimball, director of regional business development at ThinCats, said.
“As Leeds has a higher proportion of growth companies than the UK average and high street banks find it harder to fund this type of business, it is encouraging that Leeds is finding alternative funding from lenders such as ThinCats.
“ThinCats has almost £1bn of capital from institutions and other long-term investors waiting to be deployed across the UK.
“Our message to business owners looking to fund their growth plans in 2019 is speak to your accountant or business adviser and look beyond the banks.”
It comes after ThinCats revealed that it had a record-breaking year in 2018, lending more than £112m to small- and medium-sized businesses.
This is more than double the amount which was lent in 2017, and boosts the P2P lender’s total loan value since inception to £350m.