Member Article

SME owners make "personal finance injections"

A high proportion of SME owners have used personal funds to “inject” their business, according to the latest SME Finance Monitor report.

The report looked at over 4.5 million companies with a turnover of less than £25m that are not 50%+ owned by another firm, in Q4 2012.

Respondents indicated that awareness of various initiatives to support lending to SMEs had changed little in the past year, and larger SMEs were more likely to be aware of options from the bank.

14% of SMEs interviewed had plans to apply for new or renewed finance facilities in the first three months of Q1 2013.

Appetite for finance remained stronger amongst those with employees, and those with a minimal or low external risk rating.

A fifth of SMEs in Q4 met the definition of a “future would-be seeker” of finance, a similar proportion to the equivalent quarter of 2011.

Reluctance to borrow was attributed to the current economic climate, and 17% of those “future would-be seekers” cited discouragement as their main barrier. Discouragement was defined as assumption on the SMEs part that the bank would say no.

Matthew Fell, CBI director for Competitive Markets, commented: “It’s good news for growth that more lending applications from small and medium-sized firms are being approved by banks. There are also encouraging signs that businesses are feeling more confident about applying for finance.

“More SMEs now know about the Funding for Lending initiative but the Government must work even harder to improve awareness and access to this, and other finance support, by creating a new one-stop-shop under the Business Bank.”

This was posted in Bdaily's Members' News section by Tom Keighley .