iwoca releases its SME Expert Index

Wednesday 31 March 2021 10:22 CET | News

iwoca’s new SME Expert Index has revealed that the most requested reason for applying for unsecured finance was to ‘manage day to day cash flows’, according 41% of respondents.

One in four brokers stated that to ‘grow the business’ was the most common purpose for a loan, whilst 20% suggested that bridging cash flow gaps was the key driver behind finance applications.

Despite the application deadline for the Coronavirus Business Interruption Loan Scheme (CBILS) ending, demand for the government-backed loan scheme remained relatively steady in January 2021 compared to the previous month; 57% of brokers said it was broadly the same. One in five (18%) brokers submitted more applications for the scheme in January 2021 than in December 2020, whilst one quarter reported that they had submitted fewer applications.

However, brokers suggest that demand for unsecured finance from small business owners rose slightly in January compared to December, with over one third of respondents (36%) stating that they had submitted more applications to lenders compared to 18% who had submitted fewer.

Brokers found that those applying for CBILS were looking to borrow towards the lower end of the range available. 92% of applications made in January were for EUR 293,000 or less, with two-third of submissions ranging between EUR 175,890 and EUR 293,00. This remained consistent with the previous month, with 66% of respondents noting that the average loan request was the same as December.

Moreover, two-thirds of brokers said that ‘speed of receiving a decision’ was the factor which most often played a part in deciding which lender to send a submission to, ahead of whether the amount requested met the lender’s offering (56%). Incidentally, 26% of brokers sent more CBILS applications to non-bank lenders in January compared to December (13% sent fewer), which may reflect our findings of the importance of speed in the unsecured lending space.

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Keywords: fintech, lending, cash flow, survey
Categories: Banking & Fintech | E-invoicing, SCF & E-procurement
Countries: United Kingdom
This article is part of category

Banking & Fintech