New figures from the Finance & Leasing Association show another year of growth in asset finance. This growth further underlines the role of alternative finance services as access to small business lending continues to be challenging.

According to the association, the use of asset finance rose by 3% in 2012, with deals worth over £21.4 billion concluded over the 12-month period. Driving growth was IT equipment finance (up by 17% to £1.4 billion) and plant and machinery finance (up by 12% to £4.6 billion). Car finance rose by 5% to £6.6 billion.

Further evidence of the growth of non-traditional SME finance comes in the form of news that the Enterprise Finance Guarantee loan scheme has helped more than 10,000 businesses access loans worth £1.1 billion since May 2010. The government small business loan scheme provides security for SMEs to secure conventional loans of up to £1 million.

Unsurprisingly, announcement of the milestone has brought calls from the government for banks to make more use of the SME lending scheme. As ever, there remains a question mark against the willingness of banks to relax their cautious positioning, although the Funding for Lending scheme is making some inroads.

What is clear is that the role of alternative SME finance is continuing to grow. While focus should arguably be on a British Business Bank than smaller schemes, the continued growth of asset finance, and the selective invoice discounting-led expansion of the overall alternative finance sector, emphasises the shift taking place in the small business lending landscape.

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