Record numbers of SMEs are getting approved for finance

Increasing numbers of small businesses have applied for finance in the past three months, and more are getting approved, new research shows.

A report by the Federation of Small Businesses (FSB) has found that one in three firms have sought new finance facilities during the second quarter of 2020, up 20 percentage points on last year.

The success rate for applications hit an all-time high of 81 per cent, the FSB said, with much of the support believed to be coming through bounce back loans.

The findings came from the trade body’s second quarter small business index, which surveyed 1,486 small- and medium-sized enterprises.

The report also found 23 per cent of business owners expect their performance to be “much worse” over the coming quarter compared with the past three months, while three quarters reported that profits fell in the previous quarter.

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“The bounce back loan scheme has been a clear success, facilitating more than one million loans to small firms in need,” Mike Cherry, national chair of the FSB, said.

“Those businesses now need reassurances about the future as they look to realise their full potential.

“A guarantee that they won’t have to start making repayments until they’re turning a profit would give them the confidence to invest and hire today, rather than further down the line when such activity may prove too little too late.”

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