Business & Economy
Banks reject up to £70.85 million of credit applications from North East SMEs
November 30, 2015
Companies are being forced to see funding from alternative lenders, report suggests
New analysis* from, an alternative SME lender, reveals that during the first half of 2015, banks rejected up to £70.85 million worth of credit applications from SMEs in the North East.
Fleximize’s analysis* reveals that between April and June 2015, the approval rates for smaller businesses in the UK applying for loans and overdrafts was 80 per cent and 78 per cent respectively, and the corresponding figures for medium-sized businesses was 90 per cent and 93 per cent.
This level of rejection is fuelling demand for alternative forms of lending. Fleximize estimates** that in total, up to £78.28 million from alternative lenders has been taken out by businesses in the North East region.
Max Chmyshuk, founder and managing partner at Fleximize, said: “As the British economy improves, demand for credit from SMEs is increasing but banks are still rejecting a significant number of applications. Alternative lenders such as ourselves are benefiting from this – in the first half of this year the amount we lent to clients was 211 per cent higher than in the same period in 2014.”
*Based on Fleximize analysis of British Bankers Association data Q1 2015 and Q2 2015, and Office of National Statistics data (Business population estimates for the UK and regions 2014)
**Fleximize analysis of AltFi data and Office of National Statistics data (Business population estimates for the UK and regions 2014)