Allica Bank lending delivers £5.8bn boost to UK economy

A new report by Oxford Economics has found that Allica Bank’s lending to established small and medium-sized enterprises (SMEs) delivered a £5.8 billion contribution to UK GDP in 2024, underscoring the growing role of challenger banks in supporting Britain’s real-economy businesses.

The study, commissioned by Allica Bank, shows that the lender’s activity supported more than 84,000 jobs across the UK last year — equivalent to one in every 440 roles nationwide — and generated £1.4 billion in tax revenues. The analysis concludes that every £1 million in loans issued by Allica translated into £2.4 million for the UK economy, 35 jobs, and £600,000 of tax receipts.

Rapid growth and national reach

Since issuing its first loan in March 2020, Allica has grown into a major player in the SME lending market. The bank has now funded more than £3 billion in loans up to the end of 2024, surpassing £3.5 billion already this year and positioning itself as a market leader for established SME finance.

The report shows measurable impact across the regions, with nearly 10,000 jobs supported in the North West, 8,900 in the West Midlands, and 7,700 in the East Midlands. On a proportional basis, Wales and the North East saw the biggest uplift.

Allica attributes its performance to a hybrid model that combines proprietary digital technology with an expanding nationwide relationship manager team, which it plans to double in size this year.

Richard Davies, CEO of Allica Bank, said the findings highlight how alternative lenders are helping correct a long-standing undersupply of finance to growth-focused SMEs.

“Established SMEs are the engine of Britain. Yet for too long they’ve been underserved by the incumbent banks,” he said. “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.”

Challengers take lead amid lending shortfall

The SME lending landscape has shifted in recent years, with research indicating that large banks continue to offer less favourable terms to smaller firms, including lower interest returns on deposits. Allica claims this has resulted in up to £9 billion in lost annual interest for SMEs.

Separate analysis released earlier this year also identified a £65 billion lending shortfall, driven by what Allica describes as a long-term contraction by legacy banks. Challenger and specialist lenders now account for over 60% of new SME lending, marking the highest level on record.

Case studies highlight local impact

The report also highlights businesses across sectors, such as education, leisure, waste management and manufacturing, that have secured mortgages, refinancing or growth funding through Allica. They include Kinder City Nursery in Luton, KCM Waste Management in Rotherham, The Devil’s Stone Inn in Devon, and London-based costume manufacturer Rainbow Productions.

Strategic expansion continues

The publication follows a period of rapid expansion for Allica, which recently completed its third corporate acquisition with the purchase of embedded finance platform Kriya. The bank aims to secure 10% of the established SME lending market by 2028, including plans to advance £1 billion of working-capital finance in the near term.