Small and Mid-Sized Businesses Concerned about Funding Growth
Over half of small businesses have growth plans but two thirds believe they will not get the necessary funding from banks
A recent survey by Close Brothers Business Barometer (CBBB) emphasised the need for small and mid-sized businesses to consider alternative finance options. The survey revealed that over 50% of small businesses plan to grow next year, but in order to do so they must seek funding from their banks – which nearly two thirds believe they may be denied.
The number of businesses concerned about being refused funding has risen 10% since the start of 2013, with one in five respondents denied financial help by their bank in the last six months.
The survey emphasised a need for a change in small and mid-sized bank lending; and the necessity of alternative funding information for smaller businesses as 42% of respondents admitted they lacked knowledge and 13% stated they were completely unaware of any alternatives to bank lending.
CBBB conducts surveys with the UK’s small and mid-sized business owners to understand their economic and financial experiences. The survey comes at a time when small business bank lending is in the spotlight following the launch of bank ranking site Business Banking Insight(BBI) and the possibility of a legislation that would force banks to automatically forward rejected small businesses to alternative finance providers.
CEO of Close Brothers Asset Finance, Mike Randall, discussed the results and also highlighted the importance of small businesses looking into alternative funding:
“It is encouraging that many UK firms are planning for growth and seeking investment, but unless they can get access to funding it will be difficult to realise their ambitions.
“To successfully build long-term development plans, companies will require greater access to working capital. It is important they understand and explore the alternatives available to bank lending, especially if they fear being turned down.”