Small business growth stifled by lack of funding
Report calls for small businesses to receive more education and advice on funding options to ensure they can fuel growth
The growth of the UK’s small businesses is being hampered by a lack of specialist advice and support from small businesses, according to the Close Brothers Group’s Banking on Growth: Closing the SME funding gap.
Of those surveyed, 37% had been turned down for finance within their first two years and 25% had been refused when they looked to scale from a small to a medium business.
Of the 38% of small and medium-sized businesses that have used bank loans fro growth, just 25% are micro-businesses, rising to 51% amongst businesses with more than 100 employees.
More often, business owners rely on personal savings, credit cards or loans from friends and family, with more than 25% opting for overdrafts to fund growth – increasing from 23% of micro-businesses and 30% of larger businesses.
The research suggests that businesses need more education to make them aware of alternative funding sources, so they can access vital finance to grow their businesses, create jobs and boost the economy.
Adrian Sainsbury, managing director of Close Brothers Banking Division, commented: “Small businesses have not always found it easy to secure the right funding to sustain or grow their businesses. Given the huge contribution these companies make to the labour market, failure to support their growth is a risk to the UK economy.
“It’s vital that small businesses receive specialised advice and products to suit their circumstances and provide the right platform for growth. One size does not fit all.”
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Find out more about the different funding options to help grow your small business with our guide.