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 Manx Financial Group PLC (AIM:MFX), the financial services group which includes, among other operating subsidiaries, Conister Bank Limited (“Conister”), Conister Finance & Leasing Limited and Blue Star Business Solutions Limited.

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%.

Doug GrantCEO of Manx Financial Group PLCcommented: “The research unfortunately reveals what we have been observing for some time – that SMEs continue to struggle to access finance and that, worryingly, this lack of availability will cost them and the UK the economy in terms of growth at a time when it is most needed. The amount of growth that is sacrificed is significant, however, and will require new solutions designed to close this funding gap.”

On April 6, 2021 the Recovery Loan Scheme (“RLS”) was launched. A new government-backed initiative designed to help facilitate business recovery and growth following the disruption caused by Covid-19, allowing businesses of all sizes and across sectors to apply for funding of up to £10m from from approved lenders. Conister was approved in August 2021 like a British merchant bank approved lender for the RLS. It has enabled Conister to extend the support it has provided to SMEs throughout the Covid-19 pandemic. The deadline for the program was June 30, which means that capital-starved SMEs, which are still recovering and adjusting to a post-pandemic landscape, will now have to find other forms of lending.

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.

Doug Grant continues: “We were delighted to be accredited for the RLS last year. The program provided the necessary catalyst that many sectors needed to thrive. However, that lifeline has now disappeared and the demand for funds turnover expected to reach new highs as more businesses desperately need cash to counter record inflation, rising interest rates, supply chain issues, wage increases and additional pandemic-induced headwinds. With the cost of borrowing set to rise, many SMEs are facing their own cost-of-living crisis.

“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 June 2, 2022

For more information please contact:

Green target

+44 20 3963 1889

[email protected]

About Manx Financial Group

Manx Financial Group PLC has subsidiaries engaged in a suite of financial services based in the Isle of man and the UK. These companies offer financial services to individuals and businesses. Mainly owned subsidiaries are Conister Bank LimitedConister Finance & Leasing Ltd, Edgewater Associates Limited and Manx FX Limited.


Shirlene J. Manley