UK SME Lending Growth Stalls Amid Market Shifts

The specialist lending market is experiencing significant growth, outpacing the mainstream mortgage sector, with an estimated worth of £35bn-40bn and projected growth of 60-70% over the next 2-3 years, according to Ryan Etchells of Together. This shift is attributed to changing customer demographics and increased complexity in borrower needs, as traditional banks reduce their involvement in this space. Meanwhile, the Bank of England's recent interest rate cut to 4.5% is expected to stimulate mergers and acquisitions in the UK tech sector and support debt-based financing for firms. A survey by Time Finance revealed that nearly 60% of SMEs in the UK haven't explored alternative finance options, indicating a need for greater awareness and education on available financial solutions. Additionally, the European leasing market for SMEs is anticipated to improve with further interest rate cuts, creating a more accessible financing environment. Overall, while challenges remain, there are positive indicators for growth in both specialist lending and SME financing across Europe.