The total value of finance provided to businesses globally across loans, bonds and equity has hit a record level of over $6 trillion (€5.3 trillion), according to law firm, Allen & Overy.
The new high in 2014 is due to a structural shift in the way in which corporates (excluding financial institutions and real estate companies) access finance, rather than a return to pre-crisis normality, the law firm says.
In its Corporate Funding Monitor, Allen and Overy says that data from media and information firm Thomson Reuters shows changes to the type of financial products being used, with the value of bonds issued by businesses increasing by 70% since 2007 to over $1.5 trillion.
The data reveals increasing interest in emerging markets amongst investors, leading the value of bonds in Africa, the Middle East and Central Asia to increase by a third in 2014 to $20 billion – surpassing the 2007 pre-crisis peak of $17 billion for the first time.
The research also found that the value of loans made globally to corporates has exceeded the pre-crisis peak of $3.87 trillion, totalling $3.93 trillion in 2014.
However, alternative finance sources are increasingly competing with banks to provide these loans, and now account for 41% of the total funding mix. The size of deals that alternative providers have taken on has also been steadily increasing.
Angela Clist, co-head of the financial institutions group at Allen & Overy, says: "Corporates have more options than ever before, and there is no 'one-size fits all' approach."
The law firm expects markets to continue evolving as competition amongst products and sources of funding increases, she adds. This could mean greater responsibility for banks, as they look to provide access to a broader and more global market.
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