By John Antunes, Director of SME & Channels at SAP UKI

A couple of months ago the BDRC Continental Finance Monitor, which details the borrowing process for small and medium-sized enterprise (SMEs), revealed that 33% of loan applicants ended up with no loan at all for their business. With the UK’s economic recovery depending heavily on growth within the SME space, I found these statistics particularly worrying.

I had hoped that the situation may have improved a couple of months on; and there are certainly some positives to be drawn from the most recent report. 90% of SMEs who applied for a renewal of their loan were successful, and although some companies did invest their own personal funds in their business, 16% said this was something they had chosen to do to grow the business rather than something they were forced to do out of necessity. Clearly, there are SMEs out there flourishing regardless of the economic climate, growing their businesses and adapting to what we now call the ‘new norm’.

However, for the younger and less established start-ups there does still seem to be some difficulty in securing loans. In fact, 25% of the SMEs surveyed felt they were forced to inject personal funds into the business as they had no other choice. This problem was particularly apparent in smaller start-ups, specifically those with less than 10 employees.

Clearly this lack of bank lending needs to be addressed, but I also believe awareness needs to be raised around of the other financial options out there. Just because the bank turns downs your loan application, this does not mean that personal funds are your only alternative. Fortunately, there are a number of government schemes which aim to help start-ups and SMEs grow, such as the Start up Loans initiative, whilst George Osborne has committed to making lending to SMEs a key treasury objective.

But it’s not just the Government-led schemes that are providing financial support for SMEs. Over the past six months we have seen the introduction of short-term loan services, such as Wonga, and the launch of specialist banking service, Silicon Valley Bank; designed to provide financial support specifically to technology start-ups.

So although this report is testament to the fact that many SMEs and start-ups struggling to secure bank loans (instead, delving into their own pockets) there are other alternatives out there which offer great resources to propel our SME community forward.

The chief economist at the EEF, Lee Hopley, was recently quoted in a Guardian article stating that “UK banks need to be doing all they can to encourage creditworthy firms back through their doors” – and I totally agree. However, alongside bank lending there needs to be a raised awareness of the great schemes out there which can prevent businesses from draining their personal finances and really make the difference between whether a business sinks or swims. There needs to be a concerted effort on the side of the banks, the government and other lending communities to get behind our SMEs and make them aware of the options which could transform the future of their businesses – and with it, the future of the British economy.