With interest rates at a low and banks lending more than they have in years, the question of whether we are currently in a ‘Golden Age’ for bank lending, has recently been doing the rounds.
We work with UK business owners every day, and one would have thought that we might have noticed if businesses believed that the banks were providing them with a strong reliable service, but we haven’t. So, we thought we’d consider whether this truly is a golden age for the banks.
Our experience tells us that business owners are in distress about having their overdrafts and other bank products pulled with short notice. In fact, research suggests that banks are pulling £5 billion in overdrafts from business in the UK each month! What’s more alarming is that this is not new and has been a trend for almost a decade, since before the financial crisis, and banks are still not lending anywhere near as much as they did prior to 2007.
With this reminder of the poor performance of the banks in serving UK SMEs, it’s no wonder that alternatives to bank lending have flourished, and continue to do so, with the support of the government.
The alternatives to SME bank lending have all notably moved away from a ‘one size fits all’, ‘computer says no’, ‘box-ticking’, approach, understanding that different businesses have different financial needs at different times.
At rebuildingsociety.com we speak to each business, take the time to understand their business and hear their story and their plans. There’s no denying that this takes a significant amount of time and manpower, but we believe that it is what is required to be able to provide a valuable long-term service to businesses and a competitive investment opportunity for the lenders on our platform.
Since 2012 we’ve helped businesses raise over £12m in funding that is right for their business and that has been a catalyst to their growth and success. Read more about the successful financing of sweet shop Candy Hero and estate agents Taylor Made Property Management.
Whilst the banks continue to reduce suitable products for their business customers we will continue to lend and support UK SMEs. In the next few weeks we will launch our IFISA, which is likely to improve the liquidity levels of our marketplace, meaning quicker and cheaper finance for your business.
