Why is now the best time for SMEs to borrow?

With more SMEs in the UK attempting to compete with the big players in their sector by hiring the very best talent, why is now the optimum time to borrow?


According to the global firm Deloitte, SMEs should be taking advantage of what they have named a “borrower friendly market”.


The business group, who currently considers the UK banking market as a “buoyant” one – due to credit availability fast approaching a seven year high, while the cost of this credit is dropping to an eight year low.


Meanwhile, with plenty of different services on offer that can provide guidance and support, from banks and management companies to UK insolvency practitioners and accountancy firms; there’s nothing to prevent UK SMEs taking the plunge.


Ravi Sharma, Director of Commercial Re-Financing at Deloitte, explained that this “borrower-friendly” market has resulted in a “window of opportunity” for many smaller firms to remain competitive within their industry.


The market has also been encouraged by the European Central Bank, which has injected a huge amount of cash in the form of quantitative easing, he added.


Mr Sharma explained that this in conjunction with the increased level of competitiveness in the debt markets – including High Street lenders – which are equally as focused on growth; the continued development of the asset-based lending (ABL) market is creating the ideal place for lending.


Meanwhile, the emergence of a well-known alternative lender population, coupled with a number of flexible funding structures; including peer to peer and unsecured funding - borrowing is much more readily available and naturally, at competitive terms, he noted.


In the SME market, the UK has noticed that the cost of credit in Europe is far lower that the USA, which of course is the power behind this shift in trend, Mr Sharma concluded.


By Phil Smith

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