Bank Finance Still Hard To Come By For UK SMEs

Tue, 09 Nov 2010

Small businesses in the UK are still finding it hard to obtain traditional bank finance, according to new research by Venture Finance .

The lender’s annual Credit Check survey showed that almost two thirds (60 per cent) of UK accountants believe bank loans and other forms of finance are still largely unavailable to small firms .

A fifth of accountants polled said their clients saw traditional funding withdrawn or a change in conditions during the recession, while more than half (57 per cent) said clients are still suffering from a lack of cash.

The survey also revealed than just 17 per cent of accountants believe business loans are available and under a third (31 per cent) consider the Enterprise Finance Guarantee scheme to be accessible to eligible businesses.

Eight in ten accountants said decreasing availability has caused their clients to lose faith in traditional finance sources.

Commenting on the findings, Peter Ewen, Managing Director of Venture Finance, said: "The recent £1.5 billion growth fund for small businesses, set up by a group of British banks, is a welcome development."

"But there is clearly work to be done, with accountants indicating their clients have limited options to help them capitalise on the upturn."

He added that small and medium-sized firms (SMEs) need to look beyond the traditional financing options for growth "to the wider funding landscape", which includes invoice finance, asset based lending, venture capital and private equity.
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