Alternative business finance is still booming in face of fall in Bank Of England lending

22 April 2014

Responding to today’s Trends in Lending statistics from the Bank of England, Samir Desai, CEO and co-founder of Funding Circle said:

  • CEO of Funding Circle responds to fall
  • Bank of England report shows negative lending to small businesses as quarterly Funding Circle lending increases by a quarter to exceed £50 million in three month period for the first time
  • Fastest growing Funding Circle demand in Scotland, Wales and the North-West, while borrowing peaks in the South East and Midlands

“Banks are still not going far or fast enough to meet the needs of Britain’s small businesses. In the last three months alone, borrowing through Funding Circle has risen by a quarter, topping £53 million for the first time, proving that non-bank finance is essential to plug the gap.

“Alternative lenders are fast drawing a new financial landscape, with peer-to-peer lending now the first choice of funding for thousands of small businesses across the country. 77% of businesses who have borrowed through us would come back to us first over a bank.”

Figures today from the Bank of England show a further decrease in bank lending to small businesses in the first three months of 2014. By contrast, lending through Funding Circle grew by 25%, passing £53 million for the first time in a three month period, proving there is no let-up in the rise of businesses seeking alternative ways to meet their business funding needs.

In fact, year on year, lending has more than doubled from £22 million during the same period last year.

Q1 2013 (£m) Q2 2013 (£m) Q3 2013 (£m) Q4 2013 (£m) Q1 2014 (£m)
22 29 36 42 53

The increased demand can be seen in almost every region of the UK.

  • Quarterly lending peaked in the South East, Midlands and London, where small businesses secured around £11.4 million, £8.2 million and £7.6 million respectively
  • The same regions top the charts for total lending through Funding Circle since the launch of the marketplace, at circa £60 million (South East), £42 million (Midlands) and £36 million (London) in the last four years
  • Scotland experienced the highest growth in demand, with lending up by almost 85% in the last quarter. This was closely followed by Wales at 78.5%, while demand increased by half in the North West (49%) as the next fastest growing region

Desai adds: “Scotland is definitely worth keeping an eye on. While the volume of borrowing has to date been comparatively low, the growth rate is impressive. Not only has it almost doubled in the last quarter, it has grown around three and a half times compared to the same period last year as Scottish businesses increasingly recognise the ease and speed of peer to peer lending.”

Region Q4 2013 (£m) Q1 2014 (£m) Quarterly change (%) Total Funding Circle lending to date (£m)
South East  8.45  11.43  35.3 59.8
Midlands 7.16  8.22  14.8 41.8
London 6.93  7.63 10.1  36.2
North West 4.8  7.15 49.0  34.8
South West  4.24  5.22 23.1 25.1
North East 5.03  4.95  -1.6 27.2
Scotland 1.64  3.02  84.1 12.6
Wales 1.49 2.66  78.5 10.9
East Anglia 1.72 1.53 -11.0 8.9


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