A new survey from the Manufacturing Advisory Service points towards SME investment growth. With the launch of a fresh investigation into bank SME lending, invoice finance-led alternative finance has a key role to play.

According to the Service, almost nine out of ten manufacturers interviewed in its survey are planning to invest in capital equipment in the coming year, spending on average just over £120,000 per company. The potential million-pound spend is yet another sign that conditions are improving in the SME sector.

However, turning this optimism into real growth remains problematic owing to the continued challenges in accessing SME finance. On the back of a report into small business lending at RBS, a group of MPs, led by Chichester MP and Treasury Select Committee chairman Andrew Tyrie, will investigate the treatment of small firms by banks. What it will find remains to be seen, but what is clear is that businesses are increasingly turning away from traditional lending sources.

The growth of the alternative finance sector, including invoice finance, peer-to-peer lending and crowdsourcing, is testament to this sea change in SME lending, and recent developments underline the rise of non-bank lending. Pension fund manager Legal & General has announced plans to lend to small businesses and Barclays has teamed up with BlueBay Asset Management to do the same.

These developments illustrate not only how alternative finance is increasingly moving into the mainstream and becoming the focus of traditional lender interest, but also how its services are fast becoming indispensable to SMEs.

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