As Britain’s economic recovery gains strength, lending to small businesses has gone up considerably over the last year.
In just the last three months, 60% of loan applications were approved. A year ago, the figure was 45%.
High street banks should not be given all the credit. While some have shown themselves at last to be more willing to lend, some of the increase has come from other sources, such as peer-to-peer lending and crowdfunding.
The Federation of Small Businesses, which surveyed 1,635 members, said the sharp rise had boosted confidence. Its chairman said that the rise was a promising sign while pointing out that some small businesses, especially sole traders, were not getting financial help because they were not aware of their options.
Many small businesses, wary of bank behaviour, complain that traditional lenders put too many obstacles in the way of receiving a loan.
Hatched, an online estate agency, turned instead to an online peer-to-peer lending marketplace, Funding Circle.
Another source of funding has sometimes come from Secure Trust Bank, a 51-year-old lender based in Birmingham, which has increasingly provided loans based on assets. Last year it raised £50m to fund the creation of an SME lending division.
