By Maximilian Clarke

Following the credit easing initiatives announced in last week’s Autumn Statement, new research from borro, personal asset lenders, reveals that small business owners have been locked in a capital battle which has resulted in lost opportunities to grow their business.

Almost a quarter of business owners say they have missed out on a growth opportunity due to a lack of accessible finance whilst 1 in 10 small business owners have also said that the inability to raise cash has even made them consider closing their business.

With bank confidence still at an all-time low, small business owners have turned to their personal funds to boost their businesses. Over half of small business owners have used their personal funds to inject capital into their business and 17% have asked friends and family for additional funds.

With over 70% of borro’s customers being small business owners it is not surprising that 16% of business owners have also used their personal assets to secure finance over the past 12 months.

borro’s research has shown that two thirds of small and medium sized business owners lack confidence in their bank, and are unsure of whether their bank will lend to them. As a result only one in five SMEs (small to mid-sized enterprises) have attempted to secure bank finance for their business in the past year and only a third of this group have been successful in securing the finance in full.

"A dramatic shift is needed for smaller business owners to feel they can gain access to much needed finance," says Paul Aitken, CEO of borro. "While some of the initiatives introduced by the Government may ease the capital battle that has taken place over the past year; there is still a demand for small business owners to access finance quickly. This may be to ensure the business is able to take advantage of growth opportunities or address cash flow problems before they escalate. Our research demonstrates that this demand is not being met by banks and other traditional lenders.”

Challenges facing SMEs

The last 12 months have been challenging for smaller businesses with two in five experiencing a decline in revenue and the same number seeing clients reducing their budgets.

The need to access finance has never been greater for SMEs as increasing supplier costs and issues with customers paying late also top the list of concerns.


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