Lending to SMEs rises, but greater awareness required

Lending to UK small businesses has seen an overall increase, but there is a clear drop in confidence as many firms are “holding back on their ambition”.

The latest British Business Bank report on Small Business Finance Markets notes that the net flow of bank loans, comprising new loans and excluding overdrafts, to smaller businesses has kept rising, with eight quarters in a row of positive net lending totalling £5.3 billion through to the third quarter of 2016.

Chief Executive of the British Business Bank, Keith Morgan, said that last year smaller firms were "benefiting from improving credit conditions and encouraging growth in the volume of alternative finance available. While this continued improvement is welcome, our report shows that smaller businesses still face challenges on their growth journey.

“Despite the improvement in finance markets, many seem to be holding back on their ambition, not simply because they can’t access finance but because they’re cautious about seeking it in the first place.”

Mr Morgan adds that the report has clearly highlighted three key areas of focus for lenders, in order to help support the growth potential of UK small businesses, namely providing capital to the scale-up businesses, addressing regional imbalances, and further educating small business owners on the finance options available to them, instilling greater awareness of and confidence in the alternative finance products.

Whether you’re a start up or a well-established business, cash is king and managing its flow is crucial to your long-term success. Despite the increases, traditional funders are still not lending as readily as many SME businesses would hope. Alternative methods to source working capital finance to fund start up and growth are therefore becoming increasingly popular.

Our partner business, BM Structured Finance, has strong relationships with a number of providers and they will work together to tailor the facility to best suit your individual business requirements.

Contact Simon Belton of BM Structured Finance to find out more about the various funding options available to you to release cash flow from the assets of your business.