As we know access to finance amongst businesses has been tough and over the last few years the media has been filled with horror stories… but what is the reality on the ground?
Since mid 2011 an external body, the SME Finance Monitor team, has been carrying out quarterly independent research in to dealings between banks and small businesses when it comes to raising finance. Over the years the SME Finance Monitor Report has provided insight into what is really going on.
And the team has now released its latest report for quarter 1 2015.
So what are the key findings?
First the good news… 79% of those surveyed said they are now operating profitably.
This is up from 69% in the same quarter of 2013 – a significant improvement.
What about use of external sources of finance?
In quarter 1 of 2015 36% of businesses said they used external sources of finance.. that leaves a large number which are self-financing
Of those businesses using external finance 29% are using ‘core finance’ products such as overdrafts, loans and credit cards. This is down from 40% in the first quarter of 2012. This shows how businesses are moving away from the traditional sources of finance.
We often hear the statement that businesses are being starved of credit… well here’s the killer statistic which consistently comes out of this survey.
In the first quarter of 2015 48% of SMEs define themselves as ‘permanent non-borrowers’… they are not interested in borrowing and haven’t done so over the five years and don’t intend to in the future.
This was 30% in quarter 1 2012 so an increasing number of businesses are opting out of borrowing.
But what about business’ appetite to borrow over a shorter term?
The SME Finance Monitor team ask businesses about borrowing over the previous 12 months and looking ahead.
Here, 79% of businesses put themselves in this category – referred to as ‘Happy non-seekers of finance’
That’s nearly 80% of those surveyed saying they don’t want to borrow!
Added to that 72% of businesses said that their aim is to pay down their debt… and not borrow again.
So perhaps all the fuss about helping businesses to borrow is not as a big a problem as we think.
I’ll be returning to sharing more findings from the latest SME Finance Monitor Report so watch out for a future video.
Hi Rob, it was so interesting and entertaining listening to you at the Kevin Green Wealth Coach Workshop in Reading this weekend! I didnt realise you can find Finance proposals such fun!. Brilliant tips! Thanks.
Rob kindly agreed to attend the recent Pontypridd RFC sponsors networking evening and delivered what can only be described as an excellent talk on 5 Tactics to Boost Your Business and Your Profits. He kept the audience engaged throughout and the feedback from everyone was excellent. Rob is very knowledgeable on business and finance and on top of that is a genuine nice guy. We hope to have him back at a future event and I have no hesitation in recommending Rob’s services.
Rob delivered a series of 3 workshops aimed at understanding how finance houses look at finance propositions with the aim for us as a team to deliver more of a bespoke offering to our customer base. The training was delivered to a mixture of staff who work with new businesses start-ups and existing established businesses across Mid & South West Wales. Rob delivered the training with an abundance of passion and has really helped my team look at financial propositions in a different light, many thanks again Rob and I look forward to work with you in the near future.
Further to your recent presentation at LEAD Wales just wanted to say it was very refreshing to see somebody talk passionately and positively about finance, very insightful!
I wanted to thank you for such an insightful, energetic, and entertaining talk at the Kevin Green Wealth event on securing funding and creating a successful plan. It was brilliantly executed and a pleasure to listen to and the ideas I’ve learned are definitely going to help me in going forward.