Exclusive: “normal” bank loans to SMEs down 10% in 2020 as recourse to emergency loans explodes
Non-urgent loans from banks to SMEs fell 10% in 2020, as emergency coronavirus financing skyrocketed.
‘Normal’ loans to SMEs fell from £ 168 billion in December 2019 to £ 152 billion a year later, according to a study by ACP debt specialist Altenburg Advisory.
At the same time, emergency funding for the coronavirus through the Coronavirus Business Interruption Loan Scheme (CBLIS) and the Bounce Back Loan Scheme (BBLS) has exploded, with nearly £ 61 billion loaned to SMEs in December 2020.
ACP Altenburg Advisory said that when emergency lending programs end, SMEs are likely to find it difficult to obtain financing from banks that are not partially or fully underwritten by the government, as banks may have limited appetites. to lend and increase their market exposure to the SME sector further.
Many banks are already reducing non-urgent loans to new business customers of banks.
Will Senbanjo, partner at ACP Altenburg Advisory, said: “SMEs looking to raise additional funds for their growth in the coming months may need to consider alternative options, such as asset lending or alternative finance.
“Alternative lenders are open for business and are eager to deploy capital in well-run businesses that have strong growth potential. “