CreditSquare is a debt advisory firm focused on finding credit solutions for SMEs. The indices represent a rare, independent effort to trace supply and demand for SME credit across the country – a valuable resource for the alternative finance space. CreditSquare’s creation is effectively an aggregation of various high-level lender surveys, borrower surveys and official market data. The Q3 iteration of the indices has produced headline numbers that suggest that both the supply of and demand for SME credit are on the rise (as the graphic below highlights).
We’ve summarized some other key findings:
The borrower survey – responsible for supplying one third of the indices’ data – chimed with the headline numbers by indicating an increased demand for credit. However, according to the borrowers there has in fact been a contraction in the supply of credit. This of course clashes with the overall numbers.
The borrower data suggested that the contraction in credit supply was caused largely by an increase in lender-led cancellations of loan facilities and by an enlargement of the lead times associated with applying for credit.
An increasing number of SME business owners are channeling personal funds into their businesses. Those same business owners also made increased use of external forms of credit during Q3, and also expect to see an increased need for funding over the next three months.
Quantitative market data and the lender surveys – two thirds of the indices’ source data – indicate continued growth in supply and demand.
According to the market data, the positive state of credit supply in the UK is supported by continued increases in net new credit available – to which alternative finance platform are undoubtedly making a significant contribution.
To weigh these findings against some other figures from a poll-packed 2014, see our summary of the year’s surveys.