More than half of small businesses in the last six months have been refused funding by their bank, with a third given no justification or explanation for how the decision was made.
In a new survey, conducted by commercial finance broker Touch Financial, almost two thirds (59%) of businesses questioned had applied for additional funding, such as a bank loan or an overdraft, at some time in the past six months. Furthermore, four in five (80%) of those businesses refused bank funding were not given any information on alternative sources of funding.
The survey to expose the current absence of adequate funding provision for SMEs, and the impact on business confidence confirmed that an overwhelming majority of small businesses do not feel supported by UK banks, while almost all agree that the Government could and should be doing more to help.
Perhaps unsurprisingly, in answer to the question ‘Do you believe that banks are supporting small businesses?’ more than four in five (81%) of businesses responded ‘No’.
Simon Carter, Director of Touch Financial, is concerned that the help that the Government has promised has not been forthcoming:
“Any business, regardless of size or sector, should be given access to finance, if not through ‘traditional’ bank lending, then via a number of alternative funding solutions that are available”
When asked ‘Is the Government doing enough to support small businesses?’ only 2% responded ‘Yes’; the highest awareness was for Start Up Loans, which only a third (33%) of respondents had come across.
“Small businesses simply aren’t getting the information and the support that they need if they are to be the primary engine for growth as the Government has suggested,” Simon concludes.
- 55% of SMEs seeking a loan from their banks have been declined and 31% given no reason
- 98% of SMEs says the government should do more to support small businesses