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Mixed news for SME lending

Mixed news for SME lending

Aldermore, the specialist asset finance company, increased its lending to SMEs by 206% in the last year. At the end of last year, the firm had £410.2 million of outstanding loans to small and medium sized enterprises.

Aldermore’s CEO, Philip Monks, said this outstanding performance showed the strong progress the bank has made towards obtaining a significant market position. He went on to say that he was extremely proud that his team had got the right formula for customers, staff and shareholders.

Originally firms came to Aldermore because they couldn’t raise capital from their banks but now they know there is a better alternative to the indifferent service level they obtain from the large banks.

SMEs have been complaining for many years that the business banking market is not conducive to small firms and if Aldermore has been able to expand their business so quickly, it would suggest that the complaint was justified.

Aldermore launched after the credit crunch and specifically focuses on lending to SMEs and homeowners.
Small businesses may well feel that it’s just as well that Aldermore have entered the lending marketplace.

On the other hand, Barclays has now announced that it will no longer provide asset finance to companies with less than £5 million turnover per year. The bank made the announcement within a week of the Project Merlin agreement that was meant to secure additional funding for SMEs.

As part of the Project Merlin deal, the big banks agreed to make an extra £190 billion available to companies this year, £76 billion of which should be for SMEs.

Barclays decision means that it will no longer lend to small businesses and limited company contractors, and if they want to buy computers, machinery and vehicles it will hamper those companies’ ability to create jobs.

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Image: LOADED by Neal.

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