Member Article

Bank managers usurped by accountants for financial advice

SMEs are increasingly turning to accountants, lawyers and directors for financial advice over bank managers, according to statistics from Hitachi.

A survey carried out across 1,000 small and medium sized businesses in the UK showed that financial security is an increasing concern for SMEs.

Hitachi Capital Invoice Finance carried out research that showed 80% of SMEs would not go to their bank manager, but would go through alternative routes for financial advice.

Accountants were the most trusted advisors for businesses, as 43% of firms said this is the avenue they would choose.

John Atkinson is the head of commercial business at Inspired Cashflow, which is part of Hitachi Capital Invoice Finance.

He commented: “It seems many SMEs don’t even know the name of their own bank manager, and since a lot of business is done online, there is no personal attachment or face-to-face interaction like there used to be.”

Mr Atkinson suggested that online processes depersonalised financial advice, which put businesses off banks and service providers.

He continued: “It’s scary to see that nearly half of SMEs are sourcing finance from secured loans (20%), bank overdrafts (17%) and even credit cards (12%) – all of which are expensive methods of finance for SMEs -– instead of opting for cost effective and simple means.”

Businesses are also increasingly turning to friends and family for financial support, according to Hitachi’s figures, with 28% of SMEs taking this route.

Mr Atkinson concluded: “These issues with banks and SMEs gaining funding are nothing new – but continue to be concerning as many SMEs aren’t aware of the range of finance options available, such as the access to invoice finance services.”

This was posted in Bdaily's Members' News section by Miranda Dobson .