Small business lending hits record levels, according to the latest NACFB annual report


  • Traditional long term commercial property lending up across the board; with commercial mortgages up 54.8%
  • Invoice finance and equipment finance lending up 22.8% and 10.5% in the past year
  • Buy-to-let lending up 39.1% to £4.9 billion over the past 12 months; no apparent sign of a hangover from the Stamp Duty hike
  • Signs there’s been a switch back to traditional lending with 14.4% drop in new forms of business finance

NACFB-LogoLondon, 13 September 2016 — Despite the backdrop of political and economic uncertainty surrounding the EU Referendum, small business lending hit an all-time high over the past 12 months. Lending has increased by almost 30% (29.8%) to £20.7bn, according to the National Association of Commercial Finance Brokers (NACFB) latest annual figures.

The figures are based on business written by NACFB brokers between July 2015 and June 2016. Over the past year, lending to SMEs has exceeded the pre-recession high of 2007. It’s also the seventh consecutive year that total lending to small businesses has grown.

However, while traditional forms of lending, such as commercial mortgages, has had an impressive 12 months, with business written over £5.3 billion, up 54.8% on last year, lending in the alternative finance space, which includes peer-to-peer and crowdfunding, has slowed. Business written by NACFB brokers over the past 12 months has fallen by 14.4%, down from £848 million to £725 million.

The commercial mortgage business has benefited from renewed confidence in longer term lending, with a wider range of deals to choose from and an increased appetite from the traditional high street lenders. Since 2013 commercial mortgage business written by NACFB members has more than doubled, up from £2.23 billion in 2014.

Across the other finance sectors, buy-to-let has also had a very strong year, despite the various tax changes that have been announced over the past 18 months. And lending hasn’t been materially affected by the stamp duty hike, with close to £5 billion of business written in the past year; more than a third (39.1%) higher than the previous 12 months.

Other areas that have seen strong growth include, invoice finance (up 22.8%), leasing & equipment finance (up 10.5%), development finance (up 49.8%) and bridging finance (up 74.6%).

The following table shows the different finance types offered by NACFB brokers, and compares total business written over the past 12 months with the previous year.

Finance sectors

Business written from 1st July 2014 to 30th June 2015

Growth year on year (%)

Business written from 1st July 2015 to 30th June 2016

Commercial Mortgages




Leasing & Equipment Finance




Invoice Finance




Vehicle Finance








Bridging Finance




Development Finance




New Types of Business Finance (Alternative finance)*








*This figure represents Peer-to-Peer lenders, Alternative funders, Pension and Cashflow funders

Adam Tyler, comments:

“It’s been a phenomenal and record breaking year across the commercial finance sector. With the UK’s SME community showing a real appetite for growth, despite the uncertainty of Brexit, we have seen small business lending at levels above even those registered before the financial crash.

“Interestingly, the figures show that there has been a significant switch by small businesses back to traditional forms of lending. The alternative finance sector has grown at such a pace that it was inevitable that rate of growth couldn’t be sustained. Peer-to-peer will always have its place, but alternative forms of funding are no longer the only future; they are just one of many forms of finance available to small and medium sized businesses.

“There has never been a better time for businesses to secure finance, as the commercial finance sector continues to innovate and diversify. The challenge is to make sure the message reaches SMEs that there are many routes to funding.

“Although the NACFB membership is at its highest ever level, there is still a great deal of work to be done to raise the awareness, not just of the NACFB, but of the funding options offered by NACFB broker members. Commercial finance brokers have a crucial role to play in helping SMEs take advantage of the new opportunities available to them, particularly as we look to broker new trade agreements with countries outside the EU.”