Figures released by the National Association of Commercial Finance Brokers (NACFB) found that its brokers wrote £1.8bn of new development finance business between 1st July 2015 and 30th June 2016, up from £1.2bn the previous year.
Adam Tyler, chief executive of the NACFB, said: “It’s been a phenomenal and record-breaking year across the commercial finance sector.
“With the UK’s SME community showing a real appetite for growth, despite the uncertainty of Brexit, we have seen small business lending at levels above even those registered before the financial crash.”
Development finance was just one of many sectors that enjoyed significant growth.
New commercial mortgage lending grew 54.8% to £5.3bn, while bridging finance rose 74.6% to £1.3bn.
NACFB brokers also reported a 39.1% rise in business written for new buy-to-let.
Despite this growth in traditional lending, alternative finance experienced a dramatic decline.
Business written for new types of finance, such as peer-to-peer lenders and crowdfunding, fell 14.4% to just £725.5m.
“Interestingly, the figures show that there has been a significant switch by small businesses back to traditional forms of lending,” Adam observed.
“The alternative finance sector has grown at such a pace that it was inevitable that [that] rate of growth couldn’t be sustained.
“Peer-to-peer will always have its place, but alternative forms of funding are no longer the only future; they are just one of many forms of finance available to small- and medium-sized businesses.”