There is an increasing amount of money being supplied to SMEs in the UK by alternative lenders, new figures have suggested.
Money provided to smaller firms by alternative online funders rose from £318 million by last September to £852.5 million by June, according to finance firm Fleximize. The company suggests that the amount of money coming from alternative online sources is increasing by an average of 11.7 per cent every month, with the £1 billion mark expected to be broken by the end of the month.
Max Chmyshuk, founder and managing partner at Fleximize, commented: “Reaching the billion pound lending benchmark is a huge milestone for alternative lenders in the small firms sector. As the industry works more closely with government and banks, alternative finance will become better recognised, allowing us to reach £2 billion and beyond quickly.”
The promising news comes in the light of ongoing controversy surrounding the lending habits of high street banks to SMEs in the UK. Specifically, many of the banks have been criticised for their reluctance to lend money to smaller firms, which are deemed a higher risk.
In times of improving economic conditions, it is vital that smaller businesses have access to the funds they need to grow – particularly those that are exploring options for inorganic growth through business acquisitions. The latest findings from Fleximize indicate the rise to prominence of the alternative sources away from the big name banks, such as online banks, crowdfunding or the First Enterprise Business Agency (FEBA) – a regional lending option supported by the European Regional Development Fund to help those who struggle to secure funding from high-street banks.
For those looking to get their hands on the necessary money for a business acquisition, it is clear that straying from the traditional lenders is an increasingly worthwhile practice. 
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