Two surveys highlight lack of both financing and awraeness government-backed help, as key problems for small business
A LACK OF BOTH FINANCE and understanding of government initiatives are contributing towards business failures.
Two new surveys have revealed that bank lending issues are still a huge concerns for start-ups, while the failure to take up new government initiatives aimed at boosting small businesses are contributing to problems.
Bloomsbury Professional’s survey of accountants finds that more than two-thirds (71%) believe insufficient finances to fund start-up costs was a key reason for business failure. Many small businesses cannot access the finance they need, it found.
Martin Casimir, MD of Bloomsbury Professional, says: “Financing has always been a huge barrier for start-ups, but since the financial crisis it has become almost impossible to find.
“The continued difficulty in obtaining new business bank lending is holding new businesses and the UK economy back. The small businesses that could drive the UK out of recession can’t even get out of the blocks.”
A survey of 151 SMEs by Shelley Stock Hutter found that nine in ten do not believe that government schemes can help their business.
Nearly two-thirds (61%) admit to failing to understand the benefits of recent initiatives. Just one in ten knew of the recent National Insurance Holiday, while only a quarter understood the benefits of the Enterprise Finance Guarantee Scheme.
Bobby Lane, a partner at Shelley Stock Hutter, said: “Over the past year or so, there has been a clear shift from banks offering overdrafts and business loans. Many say that the days of the business overdraft are now over as banks are favouring asset-based lending such as invoice discounting or factoring. However, the mind-set of some SMEs is still set in the lending of yesteryear.
“Many small business owners will need to get up to speed on the alternative forms of finance around.”