Nearly three quarters (70%) of medium sized businesses in the UK would consider using a non-big four bank, research by UK bank and asset finance provider Bank of London and the Middle East (BLME) has found.
Out of the 175 business leaders interviewed, 20% said that their companies have already sought finance from a challenger bank.
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Over a third (36%) of the respondents said they would consider using a challenger bank to encourage greater competition in the banking market. 32% of firms considering challenger banks said it was a result of hearing other’s having a positive experience. A quarter of mid-market firms saw their respective scale with challenger banks as a good match.
The research found that mid-market firms are continuing to invest in the growth of their businesses with half of those (49%) that applied for bank finance reinvesting into the company. The most popular growth areas were: plant and machinery (41% up from 27% in 2014), finance for property (37% up from 16% in 2014) and research and development (30% up from 20% in 2014).
Jervis Rhodes, head of corporate banking at BLME, said: "The availability of financing for mid-market firms is a critical issue for the UK economy. As a direct consequence of successful applications for finance over the last four years we estimate that mid-market firms have added £148 billion in output and 152,900 jobs to the UK economy. These are compelling statistics.
"Historically the UK’s big high street banks have had a strong grip on the business lending sector. However, there is now evidence that the tide is turning we see the mid-market look for a bank with a competitive offering that has the time and expertise to understand their specific business. This will drive greater innovation and create a healthy, vibrant landscape for business lending across the UK."
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