One of the major highlights in this year’s report is the central role played by mainstream banks, which can earn fees by brokering a deal that links investor with borrower.

To banks boasting long client lists, but keen to generate income without putting their capital reserves to work, this approach makes good sense. It is in line with financial regulators’ ongoing attempts to increase bank lending for SMEs and the real economy (or, at least, to facilitate intra-European lending) while still maintaining a safe banking system with well capitalised banks.

In 2016, 54% of borrowers raised capital via private placed loans intermediated by a regulated lender, against 48% the previous year, making it the most popular form of alternative finance. The increase was up sharply in Italy (from 40% in 2015 to 57% in 2016) and the UK (27% to 43%), but also up in Spain (from 50% to 57%), where, as noted earlier, bank lending has fallen sharply over the past year. Germany was the only market where private placed loans intermediated by a bank fell. France was static, where 90% of borrowers used their banks to intermediate the private placed loan.

Two of the most common forms of alternative finance continue to be privately placed loans and bonds. The former dropped a little, to 46% in 2016 from 55% in 2015. Privately placed bonds enjoyed a surge in popularity in 2016, with 37% of borrowers raising capital this way, against 22% in 2015. The rise was strongest in France (up from 23% to 43%), Italy (3% to 37%), and Spain (13% to 37%).

Investors showed the same preferences as borrowers, though the addition of private equity investors to the research has resulted in a significant increase in the use of private equity (from 9% in 2015 to 40% in 2016). Asset-based lending has also jumped up the preference ratings for investors, from 9% in 2015 to 35% in 2016.