SMEs Still Struggling To Access Finance

The latest figures from the Bank of England has revealed that business lending grew at the fastest rate since January 2013.

Overall net lending to non-financial businesses increased by £720m in September 2013.

Disappointingly, lending was found to be lower than at the same point last year.

The report also revealed that small and medium-sized companies are still struggling to access finance.

Adam Marshall, the British Chambers of Commerce's director of policy and external affairs, added: "It's good to see overall business lending rise, as this has an impact on business confidence.

"Yet these new figures show that while large firms have little difficulty tapping debt markets, SMEs – and particular young, fast-growing firms – continue to struggle to access growth capital."

The Bank of England report follows a recent report published by Begbies Traynor which found that small to medium-sized firms were feeling the brunt of the financial distress.

The ‘Red Flag’ research revealed a 29% increase in ‘significant’ problems amongst SMEs, while the level amongst larger companies fell by 16%.

Expert Opinion

Despite all the positive news about the economy over the last few weeks, this report is a stark reminder that the recovery is not guaranteed. <br/> <br/>“It’s certainly good news that bank lending has increased, but it doesn’t compare favourably with last year and it is very disappointing that SMEs are continuing to struggle to access the capital they need to grow. <br/> <br/>“There a number of government scheme designed to address this issues, but it is clear that more still needs to be done. SMEs are the backbone of the UK economy and if they are held back, then the recovery will not be sustained.” <br/> Steven Beahan - Partner