Report Reveals Confidence About Economy As Majority Seek Expansion Capital
According to new research, the majority of small and medium-sized businesses (SMEs) in the UK are uncertain where to access growth capital - with many admitting that their understanding of less traditional forms of funding could be better.
According to the Close Brothers Business Barometer, many businesses are keen to seek funding for growth over the next 12 months.
Outside of London, firms based in Yorkshire are the most likely to seek growth capital (50.7 per cent). This is followed by the North East and then the West Midlands.
In the West Midlands, almost half (43 per cent) of business owners admitted their knowledge of funding sources other than the conventional sources, such as overdrafts and loans, could be improved. One in 10 business owners claimed they were completely unaware of any bank lending alternatives.
Mike Randall, CEO of Close Brothers Asset Finance, said: “For many, accessing finance can seem like a daunting task if they perceive that banks aren’t willing to lend and applications are likely to be turned down. However, our findings would seem to suggest that firms are not being pro-active enough when it comes to financial planning and many are failing to seek appropriate alternatives to bank lending.
“We would urge businesses to widen their search and consider other means of funding to help them achieve their potential. Business owners need to explore the broad range of financial solutions available to them.”
He added: “Asset finance is a flexible form of funding that allows firms to unlock the capital tied up in their existing assets so that it can be used to facilitate their expansion strategy.”
Expert Opinion
It is encouraging to see so many small and medium sized firms expressing their confidence about their economic future and looking to access growth capital. <br/> <br/>“There are many non-traditional bank lending options for SMEs and it is vital that they research and consider all of their options. <br/> <br/>“There are lots of alternatives available to traditional bank loans and overdrafts including invoice finance, assets finance and leasing. Indeed we are seeing many SMEs use these alternatives to traditional bank lending in the asset based lending industry. Given the results of the survey we are only expecting this use of alternative finance to continue to grow and be more popular over the next 12 months.” Jon Bew - Partner