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Despite the fact that more than a quarter of SMEs find banks’ inflexibility
their greatest challenge when trying to secure funding and one in five finding
their bank manager ‘not helpful’ when it came to reviewing finance options, new
research has found that banks still have the
stranglehold on SMEs when it comes to funding their businesses.
The research, by Bibby Financial Services reveals that second only to ploughing personal savings in to making
their dream a reality, nearly a third of entrepreneurs still rely on bank
funding to stave off cashflow problems.
Of those that use other forms of finance, 35% would still consider approaching
the bank to fund their business.
David Robertson, chief executive at Bibby Financial Services, commented: “While
more flexible forms of funding such as invoice and asset-based finance are
becoming increasingly popular with small business owners, with almost a quarter
of those surveyed preferring these types of funding, it seems that SMEs still
face the ‘fear factor’ when it comes to breaking with tradition and looking
beyond their high street bank for financial help.
“With the bank being an integral part of life from an early age in managing our
personal finances, it’s only natural for those venturing in to new territory and
starting their own business to seek the security of the familiar in the shape of
their High Street bank.
"However, those that are serious about achieving business success should review
all the options and be bold enough to make the best choice for their business.
"The first quarter of this year alone for example, some 45,000 businesses have
been advanced over £11 billion pounds in funding through invoice finance
solutions".
In addition to the challenges of securing funding and maintaining a healthy cash
flow to achieve success, keeping up with the competition was thought to be one
of the most common reasons for business failure by those surveyed, with more
than a third blaming competition from both large competitors and overseas
companies.
Source:
Credit
Control Journal
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