INCREASING numbers of businesses are looking beyond their bank for finance.
An annual poll of 2,000 directors of small- and medium-sized enterprises (SMEs) by peer-to-peer business lender Growth Street found the proportion of firms that have considered non-bank finance has increased from 30 per cent to 35 per cent over the past year.
Half of respondents said they would go somewhere other than a bank when seeking business finance.
The analysis also found an increase in understanding of alternative finance options.
A third of respondents said they were not at all confident in their knowledge of non-bank funding, significantly fewer than the 45 per cent of respondents who said the same in 2018.
Two thirds had at least some knowledge of finance outside of banks, up from 54 per cent in 2018.
“The fact that nearly half of British SMEs have looked beyond the banks for business finance is a symptom of profound changes affecting the financial services ecosystem,” Greg Carter (pictured), chief executive of Growth Street, said.
“As more and more SMEs realise that there are real alternatives to the traditional banks’ offerings, I expect this figure to keep rising.
“It’s incredibly exciting to see the growing numbers of providers challenging banking orthodoxy.
“I don’t think business owners want the moon on a stick: they want fast, flexible access to finance, and they want a combination of cutting-edge technology and empathetic, understanding relationship management. The firms that bring this combination to market will prove crucial in providing SMEs with the best finance options available to them.
“Non-bank funding options have a central role to play in the future of UK business banking.”