The National Association of Commercial Finance Brokers (NACFB) has released the results of its latest annual survey of its members.
The survey produced a number of crucial points:
- - NACFB Survey sees Bridging Finance increase by 180 percent year on year
- - Development Finance up by 103 percent over the same period
- - Total commercial lending to SMEs via brokers up by 14 percent year on year
- - Buy-to-let mortgage lending increases again, but this time by 46 percent after huge drop three years ago.
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.
“There has been an increase in the number of lenders in the market; the NACFB now has 50 percent more funders than it did a year ago. The largest area of growth has been the Short Term lending market which our members report has grown by 180 percent, which was closely followed by development finance at 103 percent.
“The total amount of business written in these two sectors by our members over the last year is in excess of £2.8 Billion. Despite many other lenders’ protestations that they are lending more than ever, these figures reveal what anecdotal evidence has already shown: that funding for businesses can now come from a variety of sources.
“Whilst we are very pleased to report that there is an increase in lending over the last twelve months, this has come from a very small base compared to the peak of the market in 2007 and still only represents 44% of that total.”
He continued: “Our asset finance brokers in particular have struggled to find funders and have relied on one particular source for over a couple of years now. This has meant that many businesses have not been able to renew their equipment or to purchase new for expansion. However, we are reporting an increase for the first time in three years, albeit at only 3.5 percent.
“The increase in invoice finance for the fourth consecutive year shows that our members are seeking more cost effective borrowing where they can, as overdrafts limits are reduced but costs have increased.”
Adam Tyler added: “Around 90% of small businesses bank with the four main high street banks; but when it comes to borrowing SMEs should not be restricted to these lenders. NACFB members have access to 68 different providers for their clients. Businesses do want to borrow; they do want to grow.
“A recent survey of SMEs showed that only 16 percent had applied to their banks for borrowing, of which one third were rejected. These businesses need to feel confident when they are considering borrowing, as many are falling at the first hurdle and not even making it in to the current statistics. Recent feedback from across the membership has indicated that whilst we saw a criteria ease in the early part of the year, this has tightened up once again.”
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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