SMEs seeking banking alternatives for business finance

The data found that 49% of SMEs would rather go somewhere other than a bank and the number that have actively considered non-bank finance has increased to 35%, up from 30% in 2018.

People’s understanding of alternative finance options is also shown to be on the increase. 34% of respondents said that they were not at all confident in their knowledge of non-bank funding, significantly fewer than the 45% recorded in 2018.

66% of respondents had at least some knowledge of finance outside of banks, up from 54% in 2018.

Greg Carter, CEO at Growth Street, commented: “The fact that nearly half of British SMEs have looked beyond the banks for business finance is a symptom of profound changes affecting the financial services ecosystem. As more and more SMEs realise that there are real alternatives to the traditional banks’ offerings, I expect this figure to keep rising.

“It’s incredibly exciting to see the growing numbers of providers challenging banking orthodoxy. Having announced a ground-breaking new partnership with Starling Bank last year, Growth Street is at the forefront of this trend.

“I don’t think business owners want the moon on a stick: they want fast, flexible access to finance, and they want a combination of cutting-edge technology and empathetic, understanding relationship management. The firms that bring this combination to market will prove crucial in providing SMEs with the best finance options available to them. I think non-bank funding options have a central role to play in the future of UK business banking.”