The demand for larger loans among small and medium-sized enterprises (SMEs) in the UK has surged, according to the new data released by small business lender iwoca.

iwoca’s Q1 2024 SME Expert Index shows that 28% of SME finance experts reported that the most requested loan amount was over £100,000, marking a 56% increase from the previous year.

The index, which reflects insights from finance brokers who submitted more than 2,500 loan applications in four weeks, highlights a positive trend in the UK lending market for SMEs.

With 70% of brokers expressing optimism about SME prospects in 2024, and only 8% feeling pessimistic, the outlook for the year ahead appears bright.

This optimism is further underscored by the fact that 37% of brokers noticed an increase in finance applications from SMEs since the last quarter, while 49% observed that the volume of applications remained stable.

The primary goal for seeking loans, as reported by 41% of brokers, is to support SME growth.

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This is in line with the forecast by 86% of brokers who anticipate a rise in finance demand from SMEs over the next six months, marking the highest level of confidence recorded in the past six quarters.

iwoca has secured a £270m package of debt funding to accommodate this demand, taking its total investment to over £1bn since 2012.

This package includes £150m from Citibank and Insight Investment for expansion in Germany, and an additional £120m from Barclays and Värde Partners for UK operations.

As the UK emerges from recession, concerns among the nation’s 5.5 million SMEs regarding a future economic downturn have dropped to their lowest in almost two years.

Only 40% of brokers report SME worries about a recession, a decrease from the 77% peak in Q2 2022.

However, inflation remains a concern, with 38% of brokers citing rising business running costs as the main worry for SME owners.

iwoca commercial growth director Colin Goldstein said: “The UK’s SME lending market is experiencing a resurgence. We are seeing a significant rise in loan applications, with many businesses seeking larger sums to invest in growth. This coincides with low recession fears amongst SMEs – a positive sign that could point to a stronger year ahead for our economy and the small businesses underpinning it.”