Business Finance Lending Shows Small Increase


nacfb NACFB Survey 2010/2011: 
Lending to SME’s shows a small increase

  • Total commercial lending to SME’s via brokers up by 14% year on year
  • BUT overall lending still remains only at 44% of total at the peak of the market
  • Invoice finance increases for the fourth year running, now double of that in 2007
  • Buy-to-let mortgage lending increases by 46% but this follows huge drops in previous two years.

The  National Association of Commercial Finance Brokers (NACFB)  has released the results of its latest annual survey of its members. Chief Executive of the NACFB, Adam Tyler, commented: “We have continued to see the SME community struggling to raise funding and being faced with increased costs. Our latest figures reveal the true position of both excellent and vulnerable businesses across the whole of the UK.  Despite many lenders’ protestations that they are lending more than ever, these figures reveal what anecdotal evidence has already shown: that funding for businesses is still very hard to access, but it has improved.  Whilst we are very pleased to report that there is an increase in lending over the last twelve months, this is now coming from a wider variety of lenders and is also being lent in a real variety of ways”

He continued: “ Commercial Mortgages rose by just over 6% and Asset Finance went up by 3.5%, however short term lending rose by a whopping 180% over the last year. Our asset finance brokers in particular have struggled to find funders, but there has been an increase in the number of smaller lessors coming into the market. To try and fill some of the gaps in funding we have seen over the last few years. It is pleasing to see an increase in Development Funding of 103%, our members have been helping provide the cash needed by developers to build much needed new residential housing stock.”

“The increase in invoice finance for the fourth consecutive year shows that our members are seeking more cost effective borrowing where they can for their SME customers, as overdrafts limits are reduced but costs have increased. We have more than doubled the amount of invoice finance facilities we have been setting up and this is now just short of £1billion of new business in the last 12 months”

Adam Tyler added: “Around 90% of small businesses bank with the four main high street banks; when it comes to borrowing SMEs are now reaching out to a wider variety of lenders. NACFB members have access to 68 different providers of business finance for their clients. Businesses d o  want to borrow; they  do  want to grow. A recent survey of SMEs showed that only 16% had applied to their banks for borrowing, of which one third were rejected. These businesses need to feel confident when they are considering borrowing, and the NACFB now receives ever increasing numbers of introductions for new business from a plethora of different SME trade bodies. Our members are now sourcing new lines of funding and this is helping the SME’s in the UK to grow and invest”

Business levels 2010/2011    

2011

Year on year %

2010

Commercial Mortgages

£2,158,338,643

6.29

£2,030,612,025

Leasing & Asset Finance

£1,027,142,233

3.50

£992,380,742

Invoice Finance

£951,165,294

6.60

£892,277,311

Vehicle Finance

£306,055,817

-68.78

£980,166,233

Buy-to-let

£1,049,407,799

46.05

£718,542,199

Bridging and Development

£2,839,241,195

108.04

£1,362,663,324

Other*

£298,435,045

-45.77

£550,346,660

GRAND TOTAL

£8,629,786,026

14.65

£7,526,988,494


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