Small and medium-sized enterprises (SMEs) are looking for bigger loans of £100,000 or more as they look to scale after the Covid-19 disruption.
According to corporate lender Iwoca’s latest SME Expert Index, loans under £25,000 were the most popular among SMEs in the third quarter of last year. However, in the fourth quarter, the majority of SMEs were seeking loans of £100,000 or more.
Iwoca noted that the shifts in priorities reflect a shift in confidence in the economy over the past year.
In the first quarter of last year, just 25 percent of brokers said their SMB clients were borrowing money to fund their growth, but that number rose to 43 percent by the fourth quarter of 2021.
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Fears surrounding Covid appear to be dispelling, with just nine per cent of brokers saying recovery from lockdown or closure was the reason SMEs sought finance.
Over a quarter (26 percent) of brokers told Iwoca that loans in the range of £100,001 to £200,000 were the most requested by their SMB clients in the fourth quarter of last year.
Meanwhile, demand for smaller loans fell 15 percent qoq.
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“This quarter’s SME Expert Index shows growing confidence among small businesses that took the hit of the Omicron shock,” said Colin Goldstein, Iwoca’s commercial growth director.
“After two years of uncertainty, SMEs can now look to growth – an encouraging sign that the mainstay of the UK economy is back on its feet.
“We must continue to help small businesses access finance to fuel this growth and contribute to a meaningful economic recovery.”
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