According to the latest research from National Association of Commercial Finance Brokers (NACFB), alternative lending fell from £847.9 million to £725.5 million between July 2015 and June 2016.
A drop of 14.1% shows the tide is turning, which suggests banks are enticing business customers with equally (or even more) attractive deals. Fewer smaller businesses are using peer to peer or cash flow finance for support and are instead going down the traditional route, like banks, or securing commercial and development finance.
The data shows bridging loan business jumped 74.6% over the last year while development finance rose 49.8%. Buy-to-let lending also rose significantly by 39.1%. Property is clearly what the public and investors are interested in and this is unlikely to change in the near future.
The fall in alternative lending could spell disaster for small peer to peer finance companies if the downward trend continues. It is not surprising that companies might stay with a trusted, traditional lender who offers a good deal (or perhaps an even better one) compared to an unfamiliar alternative finance firm.
Nonetheless, there are many options available for businesses looking to secure finance and depending on the situation, one type could prove more useful than another. It’s wise to research all types of lending as well as seek funding advice as every business requires a different level of support.