SMEs need more knowledge of available finance options to enhance growth

11 Apr 2018

A survey of over 1,000 UK businesses with more than 10 employees highlights several key challenges faced by business leaders in today’s uncertain economic climate.

When it comes to delivering growth through finance, there is a "distinct and pressing" need for greater education amongst UK businesses.

70 per cent of respondents have never considered funding their business from anywhere other than their bank and more than three quarters of respondents (76 per cent) are not confident when it comes to their knowledge of finance options outside their bank.

Whilst accountants and brokers were cited as playing an influential role as business advisers, 26 per cent of respondents indicated they were unsure of who to approach for advice when looking for funding, outlining a clear need for better education of the appropriate alternatives.

"Many businesses we speak to say that banks have made it harder for them to access really flexible, tailored finance" the report reads. "With so many businesses having never looked outside their bank for funding, it’s clear there is more for finance providers to do to boost businesses’ understanding of the finance options available to them."

The majority of survey respondents are also missing out on a potential area of growth for businesses, with 66 per cent saying they do not export goods or services at all.

Working capital can be vital for SMEs wanting to export, but just 42 per cent of respondents from London say they have a good understanding of the finance that might be available outside the banks. Although more than half of respondents from London agree that enough guidance is available to businesses looking to start exporting, the same was true for just 36 per cent of respondents across the UK as a whole.

London is however leading the way when it comes to exports and alternative finance, with SMEs in the capital indicating they are better aware of their options than businesses in other parts of the UK. But more still needs to be done when it comes to getting businesses exporting in the first place.

Despite exports being key to growth in the coming years due to Brexit, International Trade Secretary Liam Fox said recently that it is "unlikely" the UK will achieve a long-stated goal of reaching one trillion pounds in exports of goods and services by 2020. The report however shows optimism that "SMEs can help the UK achieve this target."

It goes on to say: “There is huge untapped potential for SMEs in London…. As the UK renegotiates its trading relationships in the coming months and years, banks and other finance providers can help these ambitious, growing businesses to take advantage of new opportunities.”

With the UK going through a protracted Brexit process, more businesses may turn to alternative finance options when looking to deliver growth in uncertain conditions. However, whilst alternative finance is steadily becoming an ever more established part of the UK financial landscape, what is essential is that SME’s choose a specialist adviser who can recommend the right financial products for their specific business needs.

Our partner business, BM Structured Finance, specialises in sourcing and restructuring debt finance for SME businesses. We match the most suitable products to each individual circumstance and work together to ensure compatibility and satisfaction, thereby enhancing the business’ cash flow liquidity and facilitating maximum growth.

Whether you are starting up or a well-established business, cash is king and managing its flow is crucial to your long-term success. For more information about how BM Structured Finance can help you and your business, contact Simon Belton or your usual Beavis Morgan Partner.