By Daniel Hunter
A third of small-medium sized businesses (SMEs) in the UK have admitted they are actively considering alternative forms of business finance, according to new research.
The research, conducted by Bibby Financial Services, found that business owners aren't happy with the flexibility and customer service on offer at their current finance provider.
One in five of those surveyed said their current arrangement is 'inflexible' and 42% described the service they receive from their existing provider as average or poor.
David Postings, chief executive officer at Bibby Financial Services said: “Our research shows that a significant proportion of UK businesses are considering the use of other forms of finance to their existing arrangement and it seems that many are not completely satisfied with their current provider, which is likely to be a driver for change.
“SMEs today expect much more when it comes to flexibility in relation to the amount they can borrow, contract length and online access to finance.”
More than a third of businesses surveyed said a cheaper deal would encourage them to consider a new arrangement, almost one in five (17 per cent) cited a shorter term agreement as desirable, and 15 per cent of SMEs said they would like to try a providers’ services before committing.
Postings added: “In terms of finance, businesses are becoming more like consumers and they want to try out different types of funding before taking them on.
“Increasing funding available to SMEs is critical to building solid foundations for sustainable economic growth, but it’s evident that funders need to become more flexible in their approach if they are to meet the growing demands of the marketplace.”
In relation to switching finance providers, there were a number of reasons SMEs showed caution including setting-up costs, uncertainty of customer service and a lack of information about other forms of finance available.
Postings said: “Businesses are widening their scope when it comes to considering different forms of finance but it seems that they still don’t have all of the information they need. In order to help them find the most suitable source of funding for their individual business model, the finance sector needs to provide more flexibility so they can make informed decisions.”
Are you happy with your current finance deal? You can email your reactions to firstname.lastname@example.org
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