It has been apparent for some time that SMEs are facing difficulties in accessing funding from high street banks. A recent survey by fintech lender iwoca supports this. It revealed that 84% of their finance brokers reported that high street banks were increasingly reluctant to lend to SMEs. This poses a significant problem as 81% of the brokers predict that demand for financing will rise in the next six months.
The FSB and the BoE agree that action is needed
The Federation of Small Businesses (FSB) has also highlighted the challenges faced by SMEs. It comments that one in three small businesses are being offered interest rates of over 11%. The result is that rising borrowing costs have contributed to a surge in insolvencies. The Bank of England also estimates that 70% of medium-sized firms will experience debt-servicing distress. This raises concerns is that lack of financing options for SMEs could hinder their growth potential and impact the overall economy.
Colin Goldstein, commercial growth director of iwoca, warns that “With high street banks continuing to pull back from SME lending, small businesses need attractive options for financing. Without this, the significant growth potential that SMEs offer the economy will be lost.”
Colin Goldstein is quite right in what he says. The question is how to find any, let alone the most attractive, options for financing and growing your business. This is where we at BFS can help with our many Lender contacts. Contact us for a free consultation on what options may be available to your business! Call us on 0800 093 5240 or e-mail to firstname.lastname@example.org .