Challenger banks and specialist lenders made up 51% of 2023 funding

Friday, March 22, 2024 By Aaron Strutt

The latest data from the NACFB’s annual report has revealed that more than half of broker-led SME lending in 2023 was facilitated through challenger and specialist banks, capturing a combined market share of 51%. This trend underscores the increasing reliance of brokers and their SME clients on non-traditional banks for financial support and growth initiatives.

The NACFB's findings are corroborated by data from the British Business Bank, indicating a similar combined market share. The NACFB’s report further reveals that high-street lenders accounted for just under a third (29%) of the lending volume, while NACFB Members’ 'own book' lending also saw a notable rise, contributing to approximately 7% of all successful transactions.

This shift indicates a diversifying lending landscape, offering SMEs a broader spectrum of financing options. 93% of NACFB Members brokered deals with challenger banks last year, with over a quarter (26%) engaging with Community Development Financial Institutions (CDFI), despite these institutions representing a smaller fraction of the total lending value.

More detailed information on the lenders selected by brokers can be found within the 40-page ‘Pathways to Prosperity’ NACFB membership report, available online.

Source: NACFB, Pathways to Prosperity   

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