Banks are refusing to provide funding to around a third of small businesses – increasing the probability of cashflow problems and missed opportunities. This was the finding from research carried out by cash advance provider Liberis.
Besides this, nearly two thirds of SMEs are believed to be unaware of the alternative funding options now available on the market. Out of all of the micro-business respondents to the survey, 35% revealed that they had resorted to using their personal savings to keep the business afloat, while others had sacrificed family holidays and spending quality evening or weekend time with their families.
These survey results were revealed just as Liberis announced it was the latest to join alternativebusinessfunding.co.uk – a finance portal launched in March, designed to give small and medium businesses access to non-bank funding.
Reasons small businesses require funding
The statistics gathered during the research revealed other interesting details regarding funding for small firms, along with highlighting some of the major concerns. Two thirds (66%) of micro businesses said they required less than £10,000 funding and nearly half of the respondents (49%) were seeking funding to aid their cash flow. Around a quarter of the companies needed finance to cover the cost of new stock, while 46% required funds to help the business to grow and develop.
As well as the financial strain of being refused credit from banks, almost three quarters of businesses questioned said a loan refusal has caused increased stress, with a fifth reporting a negative impact on their health. But cashflow was the major factor overall, with 40% stating this was the biggest concern.
Have you had any trouble obtaining funding from the bank? What impact has this had on your business and health?