New research: more than one in five SMEs do not have access to external financing
– 22% of SMEs that needed external financing in the last two years did not have access to it
– 27% had to stop or pause an area of their business due to lack of funding
– The main barriers to obtaining funding were cost, processing times and lack of flexibility in repayment terms
– 34% of SMEs fear that their business will not grow in the next 12 months, however, with appropriate external funding, SMEs estimate that their business could grow by around 17%
– The deadline for the stimulus loan program has passed on June 30, which means that SMEs in need of capital will have to find other forms of loan
More than one in five (22%) small and medium-sized enterprises (“SMEs”) that needed external financing and/or capital in the past two years were unable to access it. Indeed, more than a quarter (27%) had to stop or pause an area of their business due to a lack of funding. This is according to new research* commissioned by
The research showed that the biggest barriers SMEs faced in finding external finance/and/or capital were that it cost too much (23%), the process took too long (19%) and that there was a lack of flexibility in the reimbursement conditions (17%). SMEs also cited other barriers such as the lender not understanding their business (16%) and receiving poor customer service (10%).
The research also revealed that SMEs have been forced to suspend or stop activities such as expanding into new markets, hiring the right staff and marketing, due to a lack of funding. Industry, finance and accounting, retail, and IT and telecommunications were the sectors most affected due to a lack of external financing and/or capital.
Over the next 12 months, nearly two in five SMBs (38%) believe that sales will be the main areas of business that will see growth, followed by recruitment (19%), new product development (18%) and expanding into new markets (17%). ).
The research also found that a third (34%) of SMEs fear their business will not grow in the next 12 months. However, with appropriate external financing, SMEs on average estimate that their business could grow by around 17%.
Some sectors of the economy are recovering faster than others. For the sectors still in difficulty, they require additional government intervention, but for the others, no further government intervention is necessary.
“A government-backed, industry-focused lending program that brings together both traditional and alternative lenders to secure the future of our SMEs in struggling sectors is essential to ensure growth opportunities are not lost. We very much hope that this is something that becomes In the meantime, all SMEs would be well advised to take stock of their current capital structures and, where appropriate, access fixed term loans and fixed rate to avoid additional exposure to an increasingly volatile lending market.”
Notes to Editors
*Research conducted by YouGov among 500 UK SMEs between 30 May and
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