SMEs say banks won’t lend to them
More than a quarter of UK businesses say that banks won’t lend to them.
According to new research from fintech Sonovate, businesses are increasingly turning to alternative forms of finance amid the cost of living crisis.
The invoice finance provider found that 26 per cent of business leaders have had difficulty accessing finance from mainstream banks, while 38 per cent said that banks don’t understand their business needs.
Meanwhile, 41 per cent think bank lending policies haven’t kept pace with modern business needs.
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“It is evident that business owners across the country are struggling to access finance through traditional means,” said Richard Prime, co-founder and co-chief executive at Sonovate.
“On the whole, banks and mainstream lenders have not kept up with the needs of today’s businesses, and lack the agility, scalability and speed to provide organisations with critical funding.
“Alternative finance is perfectly positioned to plug this gap, and provide business owners with a lifeline through what is an incredibly challenging period, where funding is likely to be needed more than ever to grow the business. With the rate hike looming, now is the moment for businesses to consider all their options and make a decision that is right for the organisation in the long-term.”
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The research also found that those businesses which turned to non-traditional forms of finance have already seen tangible benefits. Over a third (37 per cent) said that alternative lenders make it easier to access funding, and three-quarters (76 per cent) said that invoice financing tools have greatly benefited their business.
However, despite these benefits, just five per cent of the businesses surveyed had actually secured a loan or accessed invoice finance from an alternative lender in the past 12 months.
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