SME funding crisis: BCC joins calls for reform
The British Chambers of Commerce (BCC) has joined calls for improved access to finance for small- and medium-sized enterprises (SMEs).
In a written statement submitted to the Treasury Select Committee, the BCC warned that many smaller firms are no longer seeking finance as they consider it too limited and costly.
The BCC added that business-owners are currently facing some of the most difficult economic conditions seen in generations. This is compounded by the lack of awareness of non-traditional sources of financing.
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“The continuing tough economic conditions mean many SMEs have a huge amount on their plates and don’t have the time or expertise to find the finance options that work for them,” said Jonny Haseldine, policy manager at the BCC.
“More needs to be done to help firms find the right solutions. We also need to see the British Business Bank given more resources, greater support for social enterprise lenders, and improved flexibility in funding criteria.
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“The system desperately needs to change. With investment in the UK economy continuing to toil in the doldrums, we must widen the pool of financial options available to firms to kick-start the growth we need.”
BCC research found that in 2022 almost half of smaller firms (48 per cent) did not borrow any funds. But among those that are currently using finance, half are using more than pre-pandemic and becoming more concerned about their ability to pay.
“This is an especially acute issue after many firms were forced to take on much higher debt burdens during the pandemic in order to survive,” added Haseldine.
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