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Funding Xchange shows alternative lenders have lowered borrowing costs

Funding Xchange says that borrowing costs for some UK businesses are dropping. According to their forthcoming “SME Lending Monitor,” 60% of businesses with a reasonably good credit profile are able to access unsecured loans at a total cost of borrowing below 9.5% per annum. This is below the typical rate of overdraft facilities at banks with representative APRs of 9.9%.

Funding Xchange adds that there has been a significant fall in the cost of credit for these businesses compared to 2018. While alternative lenders may provide a lower cost of capital for SMEs, Funding Xchange cautions that SME loan applicants should be wary of brokers and platforms adding on fees which can materially increase the cost of borrowing.

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This article was published in Crowdfund Insider 1st Oct 2019