Funding Circle’s Europe managing director Lisa Jacobs has said that the pandemic has led to innovation in small business lending from alternative lenders and this will continue.
Speaking at UK Fintech Week, Jacobs (pictured) said that mostly only the four big banks were serving small businesses during the last financial crisis, but with Covid-19 the situation for small business lending has improved dramatically.
She said over 100 lenders were accredited under the coronavirus business interruption loan scheme with technology at the heart of their propositions.
Jacbos said there has been a huge acceleration of small- and medium-sized enterprises (SMEs) seeking finance online with Google search volumes for small business lending up five times last year compared to 2019 and 60 per cent of businesses Funding Circle supported through the pandemic being new customers.
She said many small businesses will need finance as the UK comes out of the crisis and with more bank branches closing, alternative lenders are well placed to service this.
“This is a much better world for small business lending and the bar has been raised in terms of innovation,” she said.
“We’re in such a better situation because of the choice and competition.
“The pandemic has enabled businesses to go online to find finance and the trend is here to stay and will continue to force more innovation in small business loans in the coming years.”