Access to credit remains a problem for SMBs, says BCC

Thursday 30 May 2013

The number of UK small and medium-sized businesses (SMBs) using external finance has continued to fall, it has been claimed.

According to the British Chambers of Commerce's (BCC) SME Finance Monitor for Q1 2013, 39 per cent of SMBs used some form of external funding between January and March.

This was the lowest number recorded by the report - raising concerns about the availability of credit for growing businesses.

The BCC study found that fewer SMBs are confident their bank will agree to a future lending request - with this figure dropping from 43 per cent in Q4 2012 to 40 per cent in Q1 2013.

Among would-be loan seekers, 40 per cent said the discouragement they had felt had stopped them applying for a loan.

Some 27 per cent of respondents described access to finance as being "a major barrier" to the successful running of their business in the next 12 months.

The economic climate (43 per cent) was seen as the biggest obstacle to company growth.

John Longworth, director general of the BCC, said the latest figures are "concerning" because they show "a continued deterioration" in companies’ confidence when dealing with financial institutions.

"It is disheartening to see that the availability of external finance remains a barrier to growth for many businesses," he stated.

"Although it is understandable that first-time applicants remain among the least successful when applying for loans, many of these will be young and fast-growing firms who aren’t getting the funding they need to expand."

Mr Longworth said this is why the government needs to press ahead with the delivery of the British Business Bank, with both the scale and the infrastructure needed to help dynamic businesses to grow.

Find out more about how Microsoft solutions can help support business growth in the UK.

Posted by Jenny Arthur