SMEs facing finance struggle

posted by 4 years ago in News

A large number of SMEs are still facing barriers when it comes to accessing funding according to a new report that focuses on life for businesses after the European Referendum.

The Close Brothers claim that one in four businesses were turned down for funding at the growth stage and only one in five said their bank was always able to meet their needs. 80 per cent of those asked also said their bank’s advice didn’t always meet the needs of their business.

With small and medium sized businesses forecast to contribute £217 billion to the UK economy by 2020 these statistics show a real threat.

Surprisingly, despite a large number of businesses being turned away by the banks for funding, only 5 per cent had used peer-to-peer loans, and 4 per cent had turned to crowdfunding.

Close Brothers surveyed more than 1,000 SME owners after the EU referendum for the report, entitled: Banking on growth: Closing the SME funding gap. 44 per cent of those questioned claimed to have already sought advice, mainly from their banks, about their business’ finances following the referendum result. One in three said the government should prioritise cutting red tape after Britain leaves the European Union.

Money previously contributed to the EU was on the minds of many business owners who said they would like to see it put to good use. The same number, 29 per cent, were keen to see a cut in business rates.

With the Chancellor’s autumn statement due next week, it’ll be interesting to see if they get their wish.

So how has the EU referendum result affected SMEs?

  • 17 per cent said their business has not been affected but they are less confident about the future

  • 8 per cent reported a drop in trading with the EU

  • 6 per cent said trading had reduced outside the EU

  • 6 per cent said trading had increased outside the EU

  • 12 percent reported the cost of material increasing

  • 7 per cent said it was more difficult to access finance

  • 8 per cent found invoices were being paid later

  • 4 per cent have had to make redundancies

  • 50 per cent said it’s too soon to see any effects