With the small business loans market being inaccessible for many companies, it comes as encouraging news that there will be a new player in the arena. Enter Nationwide – who will soon be extending its services to offering business loans alongside its other finance services.
Nationwide Business Lending
Nationwide has previously been cagey about its plans to provide financial services to small and medium businesses. However, this week the bank has announced its plans to play an increasing role in providing credit to the UK’s business sector, and that it wishes to play ‘an important part in the UK economy.’
With the top five banks struggling to keep up with the credit required by UK SMEs, Nationwide could prove useful to plugging the funding gap that is set to reach billions of pounds in the next five years. With initiatives such as Project Merlin falling short of targets, any boost to the funding sector is welcome.
Nationwide has recently announced a 10% rise in underlying profits to £304 million with an underlying rise in income to £2.1bn. This could be one of the catalysts for the bank’s decision to expand.
The bank has previously said that business lending would be a ‘good fit’ for their company – however, loans are not expected to be available until next year at the earliest.
Graham Beale, the Nationwide Cheif Executive, said, ‘We’re already a lender to the commercial retail sector, we’ve been asked by customers to provide them with a corporate lending facility. We just feel it’s a natural extension of what we do.’
With the SME funding environment undergoing contraction, it’s encouraging to see another lender enterring the scene, especially one with such a long track record.
For any business struggling to find a business loan, it’s worth looking to alternative finance as well. Methods such as invoice finance can ease cash flow problems, as well as helping businesses grow and expand without it being necessary to take on new debts.
With Nationwide entering the scene, hopefully business loans will become more obtainable for SMEs. In the mean time, however, there are still plenty of alternative finance options out there.