New insights from Atom Bank’s inaugural SME Pulse survey underscore that nearly half of the commercial broker community (42%) face difficulties in securing the necessary finance for their SME clients.
Reasons range from institutionally funded specialist lenders struggling with wholesale funding lines to a cautious approach adopted by some high-street lenders.
Tech Adoption: A Catalyst for Improved Credit Access?
A significant 50% of brokers believe that the incorporation of novel technologies could pave the way for SMEs to enjoy better access to credit.
Leading the list of promising technology solutions are instant agreement in principles (72%), automated eligibility decisioning (65%), and open banking (44%).
Demand Fluctuations for External Financing
Brokers report a growing interest among SMEs for external finance, with 48% noting a recent uptick.
A resurgent business confidence (59%) and the pursuit of growth and expansion (53%) emerge as primary drivers fuelling this demand.
Conversely, a minority of brokers (16%) report a dwindling demand for external finance from SMEs.
High-interest rates (93%), economic uncertainty (60%), and reduced lender appetite (60%) are perceived as the chief contributors to this trend.
A Surge in Corporate Insolvencies Amid Fiscal Struggles
Rising borrowing costs, a competitive labour market and skyrocketing energy bills have been identified as key factors causing a 40% YoY increase in corporate insolvencies in May, in England and Wales.
The Net-Zero Pledge and Commercial Property Financing
The government’s commitment to net-zero emissions by 2050 is moulding the commercial property financing landscape.
While most brokers (71%) haven’t noticed an increase in finance seeking for net-zero initiatives over the last six months, many (59%) envision retrofitting the UK’s non-residential building stock as a potential lending opportunity.
SMEs Weathering the Storm: Views from Atom Bank’s Tom Renwick
Tom Renwick, Atom Bank’s head of business lending, observes a determination among SMEs to expand amidst the challenging conditions. He stresses that “it’s up to lenders and brokers to provide easy access to the funding they need.
“The wider industry has lagged behind the technological leaps made in the mortgage market for a long period of time, but is crying out for a step change in terms of speed, ease and certainty.
“Automated decisioning and timely access to financial information to allow lenders to facilitate this are key to delivering the service that customers and brokers demand.”
Small businesses access unsecured, fast funding from Got Capital. As an alternative lender, Got Capital offers financing solutions specifically designed for and catered to the needs of SMEs.
