Small British businesses snub banks after continued lack of support, says eBay
2 min read
17 March 2015
eBay has conducted research into the broken bond between British banks and small businesses and found the financial institutions have remained unsupportive of lending, even more so following the coalition between the Conservatives and Liberal Democrats.
The survey was conducted for eBay by YouGov, which discovered that 65 per cent of businesses said banks are not lending as much as they should, and 60 per cent said it’s more difficult to secure credit than it was five years ago before the change in government power.
A report from the UK government in February revealed that 69 per cent of would-be entrepreneurs are reluctant to start a business due to finance issues, and the eBay study supports that worry.
As such, 72 per cent of small businesses said they’re no longer reliant on support from the bank and 62 per cent of UK small businesses said they don’t need banks to become successful.
Read more on access to finance:
- Companies using 38% more asset-based finance than at height of recession
- The FD who left EY in favour of the startup world and P2P lending
- The finance providers breathing down the necks of banks
Tanya Lawler, VP of eBay UK, said: “Small businesses are increasingly confident about their prospects, with two thirds of those that we’ve spoken to predicting an increase in sales over the next 12 months.
“However, this confidence in the economy is not translating into confidence in the banks, as reflected by the high proportion of SMEs no longer reliant on banks for funding. We’d like to see more done to connect viable SMEs with alternative sources of funding that can spur sustainable growth.”
Some 35 per cent of small business owners said they don’t trust their banks, according to the report, as Barclays, HSBC, Lloyds and RBS account for 80 per cent of main banking relationships with UK SMEs.
A new “finance matchmaker” called Informed Funding entered the market at the end of February working alongside Workspace, Crowdcube and more, providing businesses with guidance on opportunities to access capital, as 87.5 per cent of British SMEs have admitted financial advisers have never mentioned crowdfunding or P2P lending.
Image via Shutterstock.