Small business bank accounts locked in capital battle

Research indicates that small business bank account holders have been locked in a battle to secure working capital, with the end result being lost opportunities for business growth.

Nearly 25 per cent of small and medium sized business enterprise owners have reported missing out on the opportunity for growth due to not being able to gain access to business loans, according to borro.com’s recent study.  The online lender polled 300 SME owners, discovering that many have had no choice but to personally finance their businesses, as 57 per cent of respondents using their own cash to grow their business ventures, and an additional 17 per cent having gone to friends and family for the needed capital.

The online lender’s research indicated that most SME owners had no confidence in their banking provider, and have doubts as to whether or not it would even offer them a loan.  Due to this uncertainty, only one out of every five small businesses have gone looking for finance from the high street for their SME – and only 31 per cent of those that have gone in search of a traditional loan have reported success in their attempts to gain access to finance.

Around 67 per cent of small business owners feel that the lending criteria of banks are too strict, as many SMEs who attempt to secure finance are turned down due to not fitting lender profiles and poor results on credit checks.  Borro chief executive, Paul Aitken, remarked that small business owners will not feel as if they can secure working capital without a dramatic shift taking place, and although that the government’s newly introduced initiatives over the past 12 months have eased tensions somewhat, more SME owners still need quicker access to finance.

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