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More woeful stats on access to finance

03 October 2012

Small businesses are finding it increasingly difficult to access credit. According to research by the Federation of Small Businesses (FSB) two thirds of smaller organisations think that the availability of credit is poor.

The 'Voice of Small Business' Index showed that during Q3 of 2012 21.6 per cent of respondents had applied for finance, this was down by one per cent when compared to Q2. However the number of refusals increased from 40.6 per cent in Q2 to 42.4 per cent in Q3.

More than 60 per cent of firms also said that finance is unaffordable, this has increased each quarter in 2012. Despite these figures half of the 2,600 respondents want to grow in the coming 12 months.

National Chairman of the FSB, John Walker, said: "It is frustrating that bank finance is still difficult to get. No matter what is said about the demand, more than 40 per cent of applicants have been refused each quarter this year. This has to change if growth aspirations are to be met."   

There are a number of ways you can improve your chance of being approved credit. Regularly checking your credit score and credit history allows you to spot reasons why you might be refused credit before you apply. Getting a credit report allows you to see what other businesses and banks see. You can apply for a free credit report from Graydon UK today. 

The survey also measures the optimism of small firms. The index showed small firms' confidence fell from 5.8 points to -4.5 in the third quarter. Across the UK 10 in 12 regions saw a decline in confidence, only London and the East Midlands (covering Derby, Leicester, Lincoln, Northampton, Nottingham) remained optimistic.

Challenging domestic conditions, access to finance and weak consumer demand were blamed for the pessimistic views. For the 10th consecutive quarter firms reported a fall in revenues meaning cash flow is further constrained.

Will be British Business Bank be the saviour that all businesses are waiting for?

 

This entry was written by Ranjna, posted on 03 October 2012 Bookmark the permalink. Follow any comments here with the RSS feed for this post. You can post a comment.

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