Two thirds extra companies are experiencing issue in accessing finance from mainstream lenders than they have been in 2022, as banks retrench from small- and medium-sized enterprise (SME) lending.
Analysis from embedded finance options supplier Sonovate additionally revealed that two in 5 (39 per cent) UK companies say that they’re anxious about the way forward for their organisation.
Half of companies surveyed by Sonovate mentioned it has been more durable to get the finance they want compared to the interval earlier than the cost-of-living disaster and 48 per cent of organisations say banks don’t perceive their enterprise wants.
Nevertheless, fintechs are stepping in to supply different finance choices and 40 per cent of companies mentioned that it’s simpler to entry finance from a fintech lender somewhat than mainstream banks.
Seven in 10 companies mentioned their firm wouldn’t have survived the present disaster if it weren’t for different finance choices.
The findings come as a current report from British Enterprise Financial institution reveals that fairness finance for UK SMEs declined by 11 per cent in 2022 to £16.7bn.
“The broader financial scenario throughout the UK is placing companies of all sizes beneath immense monetary stress, and the shortcoming to entry the money stream they want is exacerbating the problem tenfold,” mentioned Richard Prime, co-founder and co-chief govt of Sonovate.
Learn extra: UK fintech funding hits file ranges
“With banks more and more unable to supply the extent of help that companies want, there’s a important alternative for fintechs to step up and supply different finance choices that can show crucial to holding many organisations afloat. We’ve seen this demand first hand – thus far, we’ve got already supplied over £4bn in funding, and anticipate the necessity for on-demand funding to proceed to soar with decreased urge for food from banks to offer finance to the UK’s revolutionary SMEs.”
Learn extra: Fintech gives alternatives regardless of macro headwinds, says Augmentum