Lending to smaller firms has increased markedly over the last year. Sixty per cent of applications for this type of loan were rubber stamped in the last three months.
These new figures form part of the results of a survey by the Federation of Small Businesses. The survey, which polled 1,635 of its members, said this positive rise had had the welcome effect of increasing confidence generally.
An increase in crowdfunding and peer-to-peer lending has also boosted financial movement. In addition, more traditional lenders, such as high street banks, have demonstrated an increased willingness to lend.
However, it seems that there are still a fairly significant number of businesses, in particular micro businesses and sole traders, which are unaware of all the finance options open to them, particularly the more non-traditional routes. As a result, they may not go on to secure the finances necessary to get off the ground.
In addition, a number of those surveyed reported that they found the loan application process at the major banks convoluted and complicated. This is one of several reasons cited to explain why small businesses are increasingly turning to more non traditional methods of borrowing, such as peer-to-peer lending.
The market has certainly opened up of late, with a number of new lending enterprises offering new ways of funding projects getting off the ground.
Small and medium sized businesses are beginning to borrow against purchases as a matter of course, because they are finding it much trickier to get accepted for unsecured loans from high street banks. This pushed asset based loans above the £25 billion mark in 2014, and the figure continues to rise.
Several banking groups are considering a move into the asset based loans arena, with an emphasis on lending to SME businesses.