Small- and medium-sized enterprises (SMEs) are beginning to look for larger loans of £100,000 or more, as they seek to scale after the disruption of Covid-19.
According to the latest SME Expert Index by business lender Iwoca, in the third quarter of last year loans under £25,000 were the most popular among SMEs. However by the fourth quarter, the majority of SMEs were seeking loans of £100,000 or more.
Iwoca noted that the shifts in priorities reflect a change in confidence in the economy over the past year.
In the first quarter of last year, just 25 per cent of brokers said that their SME clients were borrowing money to fund their growth, but this figure rose to 43 per cent by the fourth quarter of 2021.
Fears surrounding Covid appear to be dissipating, with just nine per cent of brokers saying that recovery from lockdown or closure was the reason that SMEs were requesting finance.
Over a quarter (26 per cent) of brokers told Iwoca that loans valued between £100,001 and £200,000 were the most commonly requested among their SME clients in the fourth quarter of last year.
Meanwhile, demand for smaller loans have fallen by 15 per cent, quarter-on-quarter.
“This quarter’s SME Expert Index indicates growing confidence among small businesses, who have endured the blow of the Omicron shock,” said Colin Goldstein, commercial growth director of Iwoca.
“After two years of uncertainty, SMEs are now able to set their sights on growth – an encouraging sign that the mainstay of the UK economy is on its feet once again.
“We need to continue to support small businesses in accessing finance, to power this growth and contribute to a meaningful economic recovery.”