A survey held and recently published by The Federation of Small Businesses (FSB) showed that small firms are struggling to raise the money they need to expand. The results indicate that 42% of those who applied for a loan said they were turned down.
The FSB said that while companies were weathering the recession well, business confidence was declining. The British Bankers’ Association said lenders were continuing to provide credit to customers and that they were also helping customers seek alternative sources of funding if the banks could not provide it themselves.
Nearly two thirds of those in the FSB survey said they thought finance was unaffordable. Even in spite of this inaccessibility of finance some two and a half thousand respondents wanted to expand in the coming 12 months.
The survey suggested the number being refused had increased by a little more than a 5% increase, a total of 42.4% requests being refused.
The federation claimed that a lack of credit had contributed to a marked drop in confidence, and said it welcomed the government’s plan to set up a state-owned business bank. It warned that the proposals needed to be carefully thought through.
FSB chairman John Walker said:
- “It isn’t surprising that confidence fell back into negative territory as the recession entered its third quarter as growth flat lines.”
- “The message is clear though – businesses want to grow and invest but they need a helping hand to do so. It is frustrating that bank finance is still difficult to get.”
- “No matter what is said about demand, more than 40% of applicants have been refused in each quarter this year. This has to change if growth aspirations are to be met.”
If your business is struggling It’s advised you talk directly with your bank and maintain a close relationship with them.
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