A Third of Small Businesses Have Never Changed Finance Provider
Firms that do switch are turning to alternative lending, with two fifths believing it to be cheaper
A third (37%) of small and medium-sized firms have never changed finance provider, according to a new survey, so are potentially missing out on better rates and alternative offerings due to complacency.
The research, provided by Close Brothers Invoice Finance (CBIF), revealed that of the small and medium enterprises that have switched, a third have chosen to go with an alternative finance provider rather than a traditional lender – with the CBIF revealing that invoice finance is the most popular choice.
Two fifths of the companies that switched believed alternative lenders would be cheaper and 37% of firms felt they were more flexible.
For the companies failing to switch, the main reasons behind their complacency were cited as inefficient time to review their financial plan, lack of information on other providers and fear of being penalised by their current service.
The report was part of CBIF’s Close Brothers Business Barometer, which is a quarterly survey that displays the opinion of small and mid-sized business owners in the UK.
CBIF CEO, David Thomson, commented on the findings:
“It’s worrying that so many small and medium enterprises don’t appear to be regularly appraising their business finance, which is arguably a little complacent.
“Without taking the time to properly assess their situation and understand the full range of financial options available to them, small and mid-sized business owners and managers could miss out on opportunities for growth as the funding they have in place may not be fit for purpose.”
For more information on financial providers, have a look at Startups.co.uk’s guide to investment options here.