Excessive road banks have been changed by challenger and specialist lenders in terms of funding for UK SMEs in offers carried out by brokers, in line with a brand new report.
Knowledge suggests brokers have a essential function in diversifying SME funding entry, with 33 per cent of offers facilitated by specialist lenders and 28 per cent by challenger banks, in a survey by the Nationwide Affiliation of Business Finance Brokers (NACFB).
The pattern is nearly precisely mirrored by the British Enterprise Financial institution’s newest findings, which present challenger and specialist banks now account for 60 per cent of UK gross business lending, eclipsing the large 5 excessive road banks for the fourth consecutive 12 months.
Brokers are additionally tapping into a fair wider ecosystem of lenders, from burgeoning fintechs (two per cent) to neighborhood improvement finance establishments (0.5 per cent).
A fifth (20 per cent) of SMEs secured funding by way of NACFB brokers after preliminary rejections.
Learn extra: UK financial institution lending to SME property builders has halved since 2017
NACFB members facilitated practically three quarters (£26.5bn) of the UK’s £38bn broker-led SME lending market, in line with the report.
Lenders attributed 67 per cent of their SME portfolios to intermediaries on common.
“The longer term belongs to relationship-led lending,” mentioned Jim Higginbotham, chief govt of the NACFB.
“With 220 new shoppers per member and £38bn in intermediary-led lending final 12 months, brokers shouldn’t simply be seen as intermediaries, they’re development companions.
“Their capability to match SMEs with the precise options is why two-thirds of economic lender portfolios circulate by way of brokers.”
Learn extra: Funding Circle companions with AI-backed SME software program platform
Loyalty stays central, with practically half (48 per cent) of all brokers’ leads final 12 months coming from returning shoppers.
Dealer flexibility was additionally a powerful pattern, with 1 / 4 of SME shoppers receiving an alternate type of monetary product to their preliminary requests, while 33 per cent of brokers expanded their service providing in 2024 to satisfy demand.
Learn extra: Iwoca: Financial pessimism doubles amongst UK SME homeowners following funds