The recent long-term bank lending drought has permanently changed corporate and SME borrowing behaviour and there is a movement away from traditional banking.
One of the Club’s predictions is that the proportion of SMEs accessing non-bank credit is increasing as challenger brands and services in particular pockets of the market, such as financial technology and peer-to-peer are grabbing market share.
Those using only bank loans, bank overdrafts or credit cards declined from 29 per cent to 20 per cent between 2011 and the first half of 2014.
The only non-governmental forecasting group to use HM Treasury’s model of the UK economy says that 2014 was another year of decline for net business lending.
They do predict 2015 looks brighter for 2015, the jury is out on whether faster economic growth will translate into a better credit picture.
EY is expecting a dynamic year in 2015 as new players and the heritage banks jostle for position.
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