The researchers asked senior decision makers in small and medium businesses about the discrepancies between how much they asked for in their latest loan application and how much they had been awarded. They found the average medium sized business (50-249 employees) has a funding gap of £69,961 and the average small firm (10-49 employees) has a funding gap of £11,752. Horlick said: “This research clearly shows that the banks are not providing UK SMEs with the finance they need. Although recent figures indicate that the UK economy is beginning to experience growth, we cannot ignore a funding gap of such magnitude.” The research also found that despite almost two thirds of businesses (64 per cent) agreeing that the traditional banking system is “broken”, 72 per cent would still approach them first for a business loan. The Government has recently consulted on whether to introduce legislation requiring banks to refer unsuccessful borrowers to alternative funders. The Treasury has been in talks with the Alternative Business Funding (ABF) platform, among others, to assess the viability of designating it as the platform rejected businesses are referred to. Adam Tavener, chairman of Clifton Asset Management and catalyst for ABF, told Real Business that at his most recent meeting with the Treasury last Wednesday he was asked whether, in the event that ABF is chosen as the designated platform for referrals, it would accept. He said it would. He said: “If you were to compare it to a baseball game we’re sort of at second or third base – but a long way from a done deal. We’re not counting our chickens and we’re not suggesting for a minute that it will be us, but nonetheless we’re under serious consideration.” A Government decision on the matter is likely to be imminent given that the Government’s final Queen’s Speech of the parliament takes place on the 4th June. John Allan, national chairman of the Federation of Small Businesses, said: “Opening up banking sector competition through alternative finance providers is something the FSB has long called for. “We want to see the banks and government signpost businesses to using alternative finance providers to ensure they get the cash they need to grow.” Related: Seven steps to getting fundedMore from Real Business on the future of funding
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
