The time it takes for SMEs to secure funding has fallen by 26% in the last two years, according to the small business funding portal, The Funding Xchange.

Between 2018 and 2019 the average time between a funding offer being made and finance being drawn down fell from 19 to 14 days, driven by digital-first lenders streamlining their ‘decisioning’ processes, according to Funding Xchange. The group said improved transparency and competition – including more affordable products at lower interest rates – is a key driver for the SME lending market.

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The Funding Xchange said its figures are based on its 30,000 SME customers and over 45 business finance lenders across the UK, which show that businesses with strong credit profiles are benefitting the most from changing market dynamics, according to the SME Lending Monitor, published by The Funding Xchange.

Of this group of customers, half can now draw down within 10 days of application and 15% within just 24 hours – up from just 1% in July 2018.

The benefit of faster funding extends also to more complex cases, with 70% of Funding Xchange customers being funded within three weeks – up from 62% in 2018.

Katrin Herrling, chief executive and co-founder of Funding Xchange, said:
“The accelerating speed of digital decisioning is transforming the market, creating more transparency, competition, and ultimately speed.

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“We expect significant leaps in the next 18-24 months as new data sources and technology, including Open Banking and cloud accounting, enable the delivery of end-to-end and instant decisioning for SMEs seeking funding of up to £50k.”