Huge leap in loan enquiries as SMEs seek out funding

Close Brothers SME Apprentice Programme

one of the AMRCs current apprentices, Rebecca Taylor, and Training Centre trainer Mick Fairman. — Close Brothers SME Apprentice Programme one of the AMRCs current apprentices, Rebecca Taylor, and Training Centre trainer Mick Fairman.

Small businesses have shrugged off post-Brexit uncertainty as the start of August saw a huge surge in SME funding enquiries, according to data from the National Association of Commercial Finance Brokers (NACFB).

The NACFB’s finance platform has recorded enquiries in excess of £20m since the start of August - more than the amount of funding requested during the whole of July and twice the level over the same time period in August 2015.

The average size of loans in August has also been significantly higher than during any month last year, as businesses are showing a healthy appetite to borrow. According to NACFB figures, the average loan size requested so far during August is £128,000, up from £73,000 in July and £94,000 in June, before Britain voted to leave the European Union.

In Yorkshire, the NACFB reported a healthy quantity of leads. These were for less money than elsewhere in the UK, indicating that Yorkshire businesses aren’t borrowing for high ticket items - like commercial property refurbishments worth £2m - but for the day-to-day necessities that power growth.

Financial leads from Yorkshire nearly doubled at the start of August, compared with the same period in 2014.

Adam Tyler, chief executive of the NACFB, said: “The recent changes at Number 10 have left an aura of uncertainty around where the ‘Northern Powerhouse’ stands in the new Government’s priorities.

“Yet, as these stats show, Yorkshire’s small businesses are clearly undaunted by the prospect of uncertainty in a post-Brexit Britain.“

He added that economic growth in the North is vital to the health and prosperity of the wider UK economy.

“There is a thriving entrepreneurial community in Yorkshire, keen to invest in the future; and this surge in funding enquiries shows there is a strong appetite for growth,” he said.

“It’s crucial that small and medium sized businesses have the necessary support and access to finance to ensure that this investment in the future can happen.”

Mr Tyler said that August is typically a quieter month for funding applications, but businesses aren’t procrastinating, and are showing a real appetite for growth, even with the uncertainty surrounding Britain’s future relationship with the EU.

“Project Fear doesn’t appear to have rattled the SME community,” he said

“UK SMEs are the lifeblood of this country, but if they’re going to take advantage of the opportunities presented post-Brexit, the alternative funding sector has a vital role to play, particularly as we look to broker new trade agreements with countries outside the EU.“

The NACFB said it is important that the Government drums home the message that there are many routes that SMEs can take to find funding.

“There is some caution out there about who is lent to, but there are more lenders than there’s ever been in the commercial finance sector who are happy to provide finance,” said Mr Tyler.

Earlier this month Prime Minister Theresa May said Brexit’s opportunities must be addressed to encourage the UK’s entrepreneurial spirit.

The Prime Minister invited small and medium-sized business representatives to 10 Downing Street to hear what they want from the negotiations so they can take advantage of the UK leaving the European Union.

Ms May stressed the “significant role” SMEs play in the economy and the need for them to help the country be “expansive and outward-looking”.

She told the SME representatives: “It’s really important for us to hear your voice and be able to talk to you about what you see as the issues that need to be addressed but crucially where you see the opportunities.

“Looking at the challenges that lie ahead, it is about actually coming out of this more successful as the UK, recognising the opportunities.

“I want us to be an expansive and outward-looking country that’s going to be encouraging a dynamic entrepreneurial spirit and small businesses represent that par excellence.”

The NACFB’s finance platform, FindSMEfinance.co.uk, helps small businesses to access 140 high street and specialist lenders via the NACFB’s network of over 1,600 broker members.

The NACFB is engaged with Government and HM Treasury in connecting UK SMEs to both high street lending and alternative forms of finance.

Prime Minister Theresa May said: “Britain’s 5.4 million small and medium-sized businesses provide people with jobs, put food on families’ tables and underpin the strength of our economy.

“They are a fundamental part of my vision of building a country that works for everyone, not just the privileged few. I also want those firms to be able to take advantage of the opportunities presented by Brexit, such as exporting to new destinations.”