A new report from Oxford Economics, commissioned by Allica Bank, highlights the powerful role challenger banks play in driving Britain’s economic growth.
The report finds that in 2024, Allica Bank’s lending to Britain’s established SMEs supported over 84,000 jobs across the country, contributing £5.8 billion to the economy and delivering £1.4 billion in tax revenues.
The research reveals how a new generation of lenders like Allica are powering growth and productivity across Britain’s established SMEs. Sometimes known as the ‘real economy’, these SMEs typically employ between 5 and 250 people and account for over a third of the UK employment and turnover.
You can read the report – 'Productive finance in action: the economic footprint of Allica Bank's lending' – here.
Allica has grown rapidly since opening its doors five years ago, cementing itself as the market leader for established SME lending.
From its first loan in March 2020 to originating more than £1.5 billion of loans to SMEs last year, Allica has in aggregate lent more than £3 billion as of the end of 2024 – with it now surpassing £3.5 billion so far this year.
The report demonstrates the significant impact productive finance has on the UK economy. Key highlights include:
Allica’s impact is being felt right across the country. From Wales and Scotland to the East Midlands, Allica is helping fuel local growth and prosperity. Allica’s lending supported nearly 10,000 jobs in the North West, 8,900 in the West Midlands and 7,700 in the East Midlands. As a share of regional employment, Allica’s impact was largest in Wales and the North East.
Behind the success is Allica’s unique combination of proprietary technology and its relationship manager team – a network of experts who truly understand the needs of Britain’s SMEs and is set to double in size this year.
Richard Davies, CEO of Allica Bank, said: "Established SMEs are the engine of Britain. Yet for too long they’ve been underserved by the incumbent banks and I’m delighted to see this change as challengers like Allica support them in ways which really make a difference.
“Every £1 million in lending issued by Allica enables our established SME customers to contribute £2.4 million to UK GDP, provide 35 jobs and £600,000 in tax revenue. That’s a direct impact – creating jobs, unlocking investment and helping power growth across all corners of the country.”
The SME financing landscape has undergone a significant shift in recent years, but small businesses remain underserved by big banks and face both a savings squeeze and lending gap.
Allica research revealed that millions of SME deposits are sitting in accounts that offer zero interest, while big banks systematically offer larger companies better savings interest rates than they offer small businesses, totalling £9 billion a year missing in lost savings interest holding back SMEs.
Meanwhile Allica also revealed in April this year the £65 billion lending shortfall, in which long term trends showed a collapse in lending to UK SMEs, drastically limiting their ability to scale.
But as the legacy banks have stepped back, challengers like Allica have stepped up – with the British Business Bank highlighting that over 60% of all SME lending is now coming from challenger and specialist banks. This is the highest on record, driven by digital innovation, speed of decision-making and a focus on relationship-based lending.
From independent nurseries to manufacturing exporters, Allica’s impact has been felt across the UK – showcasing the breadth of the Britain’s established SMEs:
The research comes on the back of a successful year for Allica which also recently announced its third acquisition, acquiring UK embedded finance startup Kriya. The acquisition accelerates Allica’s drive to penetrate 10% of the established SME finance market by the end of 2028, building on momentum and targeting advancing an initial £1 billion of working capital finance to SMEs.