A third of UK firms complacent about finances, new research reveals
Despite complacency, growing number of businesses are changing from high street banks to alternative finance providers
A third of small and medium-sized UK businesses have never changed their finance provider, according to new research carried out by the Close Brothers Business Barometer.
Companies cite a lack of time to review a financial strategy, being unsure of options and a fear of being penalised by a current provider as reasons for not changing financial providers.
Of the small and medium firms that did switch provider over the last 10 years, almost a third have moved from a high street bank to an alternative finance provider. 37% changed because it offered more flexibility, with two fifths of that number believing alternative lenders are less expensive than traditional forms of finance.
In other research published this week one in five small businesses were rejected for a credit bank loan or overdraft last year, forcing them to consider alternative forms of finance.
CEO of Close Brothers Invoice Finance, David Thomson, said: “It’s worrying that so many small businesses don’t appear to be regularly appraising their business finance, which is arguably a little complacent.
“Cash flow is the life blood of any healthy business and so it stands to reason that financial strategy should be reviewed regularly throughout the lifecycle of the business to ensure that the funding in place still meets current business requirements.
“Without taking the time to properly assess their situation and understand the full range of financial options available to them, small businesses owners and managers could miss out on opportunities for growth as the funding they have in place may not be fit for purpose.”