Alternative small business lending by specialist financial institutions and challenger banks hit record highs in 2022 (£35.5 billion).
This figure surpasses the level of gross lending by traditional banks and financiers across the previous calendar year, accounting for 55% of the total £65.1 billion issued to micro and small businesses.
The statistics, provided by the British Business Bank (BBB), further highlight the seismic shift from SMEs towards alternative lenders.
Small Business Finance Markets Report 2022/23
The report uncovered a plethora of small business statistics, revealing that:
- Although gross lending was up 12.8% on 2021 figures, net lending actually fell by £8.5 billion (predominantly due to the repayment of COVID loans)
- Demand for Asset Finance reached record levels, with an increase of 11% in 2022 (£22.1 billion)
- The success rate for business loans fell from 80% in 2021 to 64% in 2022
Discussing the research results, Louis Taylor, CEO of the British Business Bank said: “There is no doubt that 2022 has been a challenging year for the UK’s 5.5m smaller businesses, with high energy prices and inflation causing issues for many.”
However, Taylor highlights that 2023 might not be all doom and gloom for SMEs: “Looking ahead, there are some grounds for optimism that we may be turning the corner.
“Recent falls in inflation and energy prices mean that more smaller businesses can now begin to look once again to how they might grow rather than merely survive.
“Equity markets are already responding to growing demand for investment in green innovation, with promising growth in net zero sector deals.”
Small businesses access unsecured, fast funding from Got Capital. As an alternative lender, Got Capital offers financing solutions specifically designed for and catered to the needs of SMEs.
