More SMEs planning to apply for finance, research shows
A study from market research agency BDRC has shown that the number of SMEs planning to apply for finance increased in 2017, rising from 10% in the first quarter to 14% in the last three months of the year.
The company’s SME Finance Monitor surveyed 132,000 businesses and also found that more SMEs are becoming aware of peer-to-peer (P2P) lending, with more than 30% being aware of this type of finance in the final quarter of 2017.
The research showed an increase in awareness of P2P lending combined with crowdfunding, with 46% being aware of these types of finance, up from 36% at the start of last year.
Nearly half (48%) of larger businesses with 50-249 employees were found to be aware of P2P lending, compared to 32% of solo operations and 31% of smaller businesses with fewer than ten employees.
The research also found that eight out of ten loan and overdraft applications made by SMEs in the 18 months to the end of last year were accepted.
SMEs also revealed the barriers to being successful, with legislation or political uncertainty and economic climate being cited as the main challenges by 15% and 14% respectively. Just 5% cited access to finance as the main barrier.
Commenting on the research, UK Finance Director of Commercial Finance Stephen Pegge stated that it was positive that fewer SMEs were seeing access to finance as a main issue.
“It is encouraging that increasing numbers of small firms are looking to use finance to grow their business in the year ahead,” he added.