The big banks to reduce funding to Small business?

Raising alternative finance for small businesses.

One of the established ‘alternative’ lenders to SMEs, iwoca, has published a new Broker survey. This claims that the main high street banks are expected to further reduce funding for SMEs. They claim that 77% of SME finance brokers believe high street banks will decrease their appetite to fund small businesses. It also says that 86% of brokers expect to see increased demand for SME finance in the next six months. However 68% believe that, in spite of this the high street banks will still reduce access to working capital for SMEs.

Analysis of Bank of England data shows that 77% of gross lending went to larger firms last year. In contrast the total value of lending by the big banks to SMEs in the first quarter of 2023 has fallen. This is by more than £1bn over the same period i.e. from £15.5bn in Q1 2023 to £14.2bn in Q1 2024.

iBOSS Comment:

The decline in lending to SMEs by high street banks has led to a rise in the popularity of specialist lenders. Some 59% of SME lending now comes from outside the big banks. These specialist lenders have proliferated, particularly since covid, with iwoca being just one of them. Indeed this has raised a new problem. That is to determine which of the ‘alternative’ lenders offers the best option for a particular business. Here is where our associate company BFS, with their experience going back over 20 years, can be instrumental. They can ensure that the best funding option(s) is chosen. For a free consultation fill in their enquiry form at or e-mail and they will get back to you.

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