More investment is being seen in the commercial property market, but through non-traditional non-banking methods, according to the Bank of England’s recent Trends in Lending report.
The study highlighted that lenders were seeing more and more non-bank investment from insurance firms and pension funds within the commercial property sector. Whilst this differentiation may be seen as a good thing, industrial experts have suggested that banks need to do more to fill the lending deficit.
The report found that lending to businesses across the UK was negative in the first two months of the year, whilst credit availability remained very low for small and medium enterprises (SMEs). In total, bank investment had reduced by £5 billion across a variety of industrial sectors in the three months leading up to February 2013.
Adam Stewart, marketing director at Rakuten’s Play, said: “SMEs continue to crave the support they continually lack. Although there have been reports from lenders that demands for loans have been minimal, our own research, focusing on the retail sector, revealed that nearly a third of retail professionals believe the government could do more to encourage banks to lend.”
Mr Stewart went on to state that companies are beginning to look at new and alternative methods for sector investment. This includes looking at international trade as a way to boost sales or shifting transactions online to avoid soaring rates on the high street.
Many companies will ask for lending, not because they are in financial struggles, but because they want some more money to help the business grow. For now, it seems that instead of waiting on banks or the government for support, it appears as though the commercial sector is shifting its gaze towards other options.