Connect with us

Hi, what are you looking for?

Business

Banks won’t lend to us, say more than a quarter of UK’s businesses

New research exposes the difficulties businesses face accessing finance from mainstream lenders and how alternative solutions can plug the gap.

More than a quarter of business leaders surveyed have had difficulties accessing finance from main banks, over a third say that banks don’t understand their business needs and two in five think banks’ lending policies haven’t kept pace with modern business needs.

The research from embedded finance and payment solutions provider, Sonovate, follows a recent announcement from the Financial Conduct Authority (FCA). The regulator warned banks to improve their treatment of small business owners after a review found ongoing instances of lenders treating small businesses unfairly when it came to areas including a sustainable payment plan, identifying and supporting vulnerable customers, and ensuring fairness. Indeed, a third of those Sonovate surveyed said that banks provide them with no other service or support beyond lending.

The research also showed that businesses which turn to non-traditional forms of finance instead are seeing tangible benefits. Over a third of businesses surveyed say that alternative lenders make it easier to access funding, and three-quarters say that invoice financing tools have greatly benefited their business, with around two-thirds citing faster transactions and business processes as key advantages.

While there is clearly a role for non-traditional forms of finance to provide improved services to businesses, Sonovate’s research exposes how few businesses make use of these types of services. Only 5% surveyed secured a loan or accessed invoice finance from an alternative lender in the past 12 months.

As the cost-of-living crisis continues to impact businesses across the country, being able to access finance quickly is hugely important. This is even more true when it comes to payroll, particularly for contract worker pay – 27% of businesses surveyed admitted to taking more than 90 days to pay contract staff, which is not a viable operational model.

Other research shows that four in ten small business leaders expect to accelerate their finance plans in response to the prospect of further rate hikes that the Bank of England is expected to implement in the coming months.

Richard Prime, co-founder and co-CEO at Sonovate, said: “It is evident that business owners across the country are struggling to access finance through traditional means. On the whole, banks and mainstream lenders have not kept up with the needs of today’s businesses, and lack the agility, scalability and speed to provide organisations with critical funding.

“Alternative finance is perfectly positioned to plug this gap, and provide business owners with a lifeline through what is an incredibly challenging period, where funding is likely to be needed more than ever to grow the business. With the rate hike looming, now is the moment for businesses to consider all their options and make a decision that is right for the organisation in the long-term.”

The Sonovate platform delivers flexible funding and a bespoke technology platform to streamline and automate the tasks related to funding and managing contract worker placements and freelancer projects. By embedding Sonovate’s invoice finance solution, cash and resources are freed up, enabling recruiters, consultancies and labour market places to focus on growing their business in the UK and internationally.

Read more:
Banks won’t lend to us, say more than a quarter of UK’s businesses

    You May Also Like

    Business

    The head of the International Monetary Fund has warned of increased risks to the stability of the financial system after weeks of banking sector...

    Business

    1.22 billion people use Instagram every month. That’s a huge number of Instagrammers trying to hit it big on the platform all at the...

    Business

    The Home Office has made next to no progress in tackling criminal fraud during the past five years, despite it having become Britain’s most...

    Business

    Since the rise of online casinos, cybersecurity has become a major concern for both casino operators and players alike. The transactions that go around...

    Disclaimer: rightdecisionnow.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2023 rightdecisionnow.com | All Rights Reserved