It is widely known in the market that banks, reluctant to lend due to regulatory constraints, have left a vacuum which has created a demand for other reliable sources of funding. This vacuum has been filled by a number of investment funds and financial vehicles which have financed mid-sized companies in Ireland, the UK and the US. This growth in alternative lending is generally regarded as a good thing. Businesses, especially SMEs, get access to a more diverse range of financing options and even mainstream banks benefit by partnering with alternative lenders, providing related services to alternative lenders or unloading riskier assets from their balance sheets.

Originally published in the Global Banking & Financial Policy Review, 2016/2017

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