New Asset Based Finance Association figures show record levels of asset-based lending. The data underlines the challenges still faced by the SME sector in accessing lending and the crucial role non-bank finance is playing.

According to the Association, for the three months to the end of June, a record amount of £18.9 billion was borrowed from asset-based lenders. This news comes at the same time as new data from the British Bankers’ Association showed a fall of £941 million in business lending in July – this is the tenth consecutive drop in the monthly business lending total.

While lending conditions for SMEs are improving, it is clear from these figures that accessing loans and overdraft facilities from banks remains problematic for small businesses and that non-bank finance products, such as invoice finance, peer-to-peer lending and crowdfunding, are becoming increasingly established as mainstream SME finance services.

The move by the British Business Bank to embrace peer-to-peer lending and the government proposal to ensure banks refer SMEs to which they can’t offer finance to peer-to-peer lending services, illustrates just how central to business growth non-bank finance has become.

Looking ahead, non-bank finance has a major role to play in ensuring that rising confidence in the SME sector turns into real growth, and that this growth fuels wider economic recovery.

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