Professional services firms are biggest users of alternative finance

A report from Big Four firm Deloitte has found that professional services are the most regular users of alternative finance, with the sector accounting for 27 per cent of all deals in the UK over the past 12 months.

The report showed a boost in alternative finance activity over the past 12 months, with the deal count in the UK standing at 120 in Q3 2017, up from 89 in Q3 2016.

Boost

The main uses of alternative financing for UK and European deals were also revealed in the report, with mergers and acquisitions (M&A) topping the list at 61 per cent.

Funding for leveraged buyouts (LBOs) accounted for 44 per cent of UK total funding, while 23 per cent went on refinancing between the UK and Europe. Five per cent of UK firms used the financing to support their organic growth.

Deloitte’s report also showed that the UK continues to be a market leader for alternative finance, with the number of deals between the end of 2012 and 2017 reaching more than 450.

Advantages

Fenton Burgin, Head of UK Debt Advisory at Deloitte, said: “In spite of political uncertainty an improved economic environment in Europe helped to bolster direct lending in the second part of this year.

“As optimism has grown, mid-market businesses have looked away from traditional bank loans and seen the flexible, reliable and significant advantages of using alternative sources of capital.”

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