Exclusive: Funding Xchange sees SME lending ‘green shoots’

By Daniel Lanyon on Monday 19 October 2020

Alternative Lending

Funding Xchange says it is seeing lenders return to its marketplace to near pre-pandemic levels.

Exclusive: Funding Xchange sees SME lending ‘green shoots’
Image source: Photo by Andrea Piacquadio from Pexels

Funding Xchange is seeing a steady growth of lenders returning to its platform, according to data exclusively revealed to AltFi.  

The coronavirus spread across the UK came alongside a challenging period for smaller firms needing to access finance. Cash from non-bank and traditional lenders dried up until the intervention of the of the government to back a series of lending schemes including the Bounce Back Loan Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS). 

As the graph below shows, Funding Xchange saw the number of lenders on its platform drift away so that by April only 20 per cent remained.  

Now, as the graph also shows, lenders have returned to the platform with 70 per cent of January’s number now back. Funding Xchange doesn’t reveal the total number of lenders and a spokesperson for the firm says it is not necessarily then same lenders.  

 

Today, it says nearly 90 per cent of offers on its platform is for non-BBLS/CBILS cash, compared to less than three-quarters in June.  

"Especially, where the CBILS scheme had pushed lenders out of their comfort zone into higher-value segments, we are seeing lenders return to their roots by testing solutions and deploying funding with increased confidence in the sub-£50k space," Funding Xchange said.

"We are also seeing the return to the market of a few lenders after ‘sitting out’ the crisis. Having kept their powder dry, these lenders are now exploring market opportunities by focusing on businesses that were not eligible for the government support schemes as they performed well during the crisis," it added. 

The data is contained in Funding Xchange's latest SME Lending Monitor. You can download the full report here.

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