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Lending to small businesses remains rock bottom


27/04/2011

By Max Clarke

Despite measured implemented to increase bankslending to small business, lending has plummeted to its lowest rate since the financial crisis began, according to figures released last week by the Bank of England.

This is despite the Government’s recent commitment to make the UK one of the best places to start finance and grow a business in Europe in last month’s 'Plan for Growth'. In a time when credit is tight and the banks are still not lending, alternative lenders such as short-term asset finance lender borro.com offer small business owners a fast and easy method of getting the cash they need, releasing capital from their existing assets in-order to fund new contract wins or to help invest in their business for growth.

Paul Aitken CEO of borro.com discusses the worrying trend of capital scarcity:

“Requests for short-term loans to small business owners secured against high value assets have risen 80% in the first quarter of 2011 compared to the last quarter in 2010. I believe small business owners are losing confidence in the banks and are reluctant to even approach banks for fear of rejection. As a result looking for alternative ways to raise immediate funding to ease cash-flow problems is the only option. We’re seeing that this is particularly true in the case of seasonal retail businesses, property developers and building contractors.”

Small businesses are attracted to the instant solution that online short-term asset lenders like us provide. Unlike borrowing from a bank where there's lots of paperwork to fill out, time delays and possibly rejection, we provide an instant cash injection which will tide the business over when they need it most. In addition, nearly all of our small business customers are paying their loans back on time. From our experience this suggests that people’s attitudes towards alternative ways of borrowing are changing and people are utilising our services more for short-term loan solutions rather then just a ‘one off’.”

 

 

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