We’re continuing our look at the outcomes from the recent SME Finance Monitor Report for the first quarter of 2015.
The SME Finance Monitor Report is a quarterly survey carried out by an independent body tasked with researching the relationship between small businesses and how they finance themselves.
Previously we looked at what the real demand for finance is (‘What’s The Real Demand for Business Finance?’) and now we’re looking at what the outcome is for those businesses that did apply for finance from their bank.
First of all of those businesses thinking of applying for finance what was their level of confidence in getting a yes? The survey found that amongst those planning to apply, 49% were confident that their bank would agree to their request.
Let’s look at those businesses that said they had applied for finance and what actually happened.
In the 12 months to quarter 1 2015 18% of the businesses surveyed said that they had what’s referred as a ‘borrowing event’ whether that’s a new finance request or a renewal of an existing facility.
So what was the outcome?
The SME Finance Monitor team stretched it back further by looking at the previous 18 months and the success rate for new and renewed facilities was that 76% got what they wanted.
Is that a bit higher than perhaps you thought?
And that 76% was an increase on the 66% success rate reported 12 months previously… so the success rate is on the way up.
Let’s strip out those looking just to renew existing facilities – there the success rate was 98% got their renewal agreed.
What about those applying for new money being those that have borrowed in the past. That success rate is slightly lower at 65% but it is up from 46% a year ago… so again more progress with more businesses getting what they wanted.
For those applying for money for the very first time then the success rate is slightly lower at 55% but this has improved from the 37% seen in the 18 months to quarter 4 2013.
Remember at the start I said that 49% of businesses said they expected to get a ‘yes’ from their bank but as we have seen, the actual success rate is much higher.
It’s in closing this ‘confidence gap’ where our focus should be… getting businesses to realise that their chances of success in getting finance is actually higher than they may believe.
Growth typically needs finance so don’t hold back your growth by assuming you’ll get nothing and so you don’t ask… bad move!
Prepare your Business Plan, get your financial information up to date and start applying!
If you want to chat through your finance options then just book a call with one of the Business Loan Services team.
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.
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.
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.
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.
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!