Alternative lenders now deploy more funds than high street banks

Summarised from Independent Business's report · Updated 2 Nov, 12:47 · Archive

Alternative lenders are now deploying more funds than traditional banks in the UK, according to the British Business Bank. This marks a significant shift in the SME funding landscape after decades in which high street banks dominated.

Traditional banks have increasingly struggled to meet the needs of small and medium-sized enterprises through rigid lending criteria that exclude strong businesses, sector-wide bans and slow decision-making processes. Many SMEs require funding quickly to capitalise on time-sensitive opportunities or address unexpected costs, but banks have proved unable to respond at the necessary pace. Steve Noble, Operations Managing Director at Reward Funding, describes 'bank inertia' as 'a real barrier', highlighting difficulties in getting banks to answer phones, consider proposals or make swift decisions.

Alternative lenders emerged in response, particularly after the 2008 financial crash demonstrated the need for options beyond traditional banking. Operators like Reward Funding have built their business by financing enterprises that fall outside banks' strict lending criteria, filling a gap left by high street institutions.

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In this story: British Business Bank · Reward Funding · UK

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