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Commercial finance brokers facilitated £38bn in lending to small and medium-sized enterprises (SMEs) in 2023, the latest membership survey from the National Association of Commercial Finance Brokers (NACFB) has revealed.

Total lending to SMEs fell by 16% from 2022’s all-time high of £45bn in what, according to commercial finance brokers, was a year marked by uncertain economic conditions and lower lending appetites.

Over half (52%) of surveyed brokers observed a decrease in lending appetites across all lender types, with nearly three-quarters (72%) of broker respondents anticipating an increase in the use of alternative lenders in 2024.

The survey, drawing from the experiences of over 2,400 commercial brokers and 155 lenders from within the trade body’s growing community, unveils an average loan size of £509,000 in 2023, adjusting to a 10% fall from the previous year.

Importantly, it also highlights the critical role of brokers, with 32% of small businesses successfully funded in 2023 having previously faced capital refusals elsewhere, marking a significant 10% increase in such successes year-on-year.

Paul Goodman, chair of the NACFB, said: “The ability of NACFB Members to turn a ‘no’ into a ‘yes’ has never been more crucial.

“With a third of SMEs successfully funded in 2023 having been already declined funding elsewhere, our Members have directly contributed to the sustainability and growth of the UK’s SME sector.

“Commercial finance brokers should no longer be the ‘best kept secret’ of business borrowers.

“With banks and lenders reducing their presence on Britain’s high streets, there emerges a significant opportunity for SMEs to fully utilise the knowledge, guidance, and support of brokers, as they affirm their position as the modern-day bank managers.”

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