Almost one-in-three SMEs in the UK has failed
to obtain external funding in the past 12 months according to
independent UK-based invoice finance firm Bibby Financial
Services.

The survey of 1,000 SMEs reported 32% of firms
which had applied for external funds in the past year had not
secured finance while 19% had only raised a level of capital
insufficient to invest. Less than one-in-ten respondents received
the amount applied for.

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Many of the firms surveyed, 58%, responded to
public criticism of business leaders for failing to generate growth
by saying the coalition government had failed to create an
environment to encourage growth.

Other findings from the survey included:

  • 23% feel the SME community is doing all it can to drive the
    economy
  • 25% want a reduction in red tape / unnecessary regulation
  • 33% say rising fuel prices have restricted cash flow
  • 27% say tax levels have impeded business
  • 17% say the associated cost of employee rights have impeded
    business

‘Traditional and alternative’

Although
the demise of the National Loan Guarantee Scheme was welcomed at
the start of the month, Edward Winterton, commercial director
at Bibby, questioned the worth of the Cameron administration
replacing it with the Funding for Lending scheme.

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The scheme, said Winterton, “aims to make
cheaper loans more readily available for small businesses, but the
government’s insistence to channel funding streams through the
banks must be brought into question.”

Winterton added that, given the difficulty of
securing finance as shown in the survey and the existing reliance
on banks to supply funds, growth would “rely on traditional and
alternative funding providers working together to provide tailored,
collaborative solutions that pool different products and
services.”

richard.brown@vrlfinancialnews.com