Surveys
Alternative Financing To Rise As Firms Cut Reliance On Banks - Survey
The trend of firms in Europe becoming less reliant on banks for sources of financing is set to continue, with new channels opening up, a survey finds.
As banks have drawn back from forms of lending in the face of tighter capital standards and shrinking balance sheets after the financial crisis, the market for non-bank or “alternative" finance is expected to grow, a survey finds.
A survey conducted among a representative sample of 111 pan-European institutional professionals between 29 May and 15 June 2015 showed that almost three-quarters (75 per cent) of respondents expect to see institutions getting more exposure to the sector; 74 per cent also said that the growth of non-banking financing, such as peer-to-peer lending, will make the financial system more robust. Associated with that point, 64 per cent said that UK and European small- and medium-sized enterprises are too reliant on traditional bank finance
The study was conducted by Amicus Finance, a firm describing itself as a “leading specialist in short-term lending solutions”.
Respondents said they expect the alternative lending sector to grow by a quarter (23 per cent) over the next 24 months.
Alternative finance includes crowdsourcing finance, peer-to-peer lending cashflow/invoice finance, property finance such as bridging loans and commercial mortgages or asset finance such as machinery and business equipment.
The role of such routes in connecting holders of capital and requirers of it can be controversial. In the UK, the Financial Conduct Authority has examined how to ensure peer-to-peer lending, for example, does not lead to abuses. Late last November, PricewaterhouseCoopers said that inovation in financial services means banks’ traditional role in funding business is under threat but the pullback can be exaggerated. (For more on that story, see here; for other stories about the issues involved, see here and here.)
Amicus offers short term, property-based lending solutions to private and corporate borrowers which include landlords, developers and owner-occupiers.
