Small firms are finding it increasingly costly to raise new finance, according to the latest research from the Federation of Small Businesses.


It has not been easy for small businesses to find finance. In recent years, high street banks have cut back on lending and small business have struggled in their efforts to facilitate business growth. As the country edges closer towards the Brexit deadline, sustaining business prosperity has become more important. If firms cannot locate finance, the future of the economy as a whole could be under threat.

The FSB conducted a survey into small business finances back in July, where 42% declared new credit to be “unaffordable” in the third quarter of 2018. Less than a quarter expressed a positive attitude towards new finance, with high street lenders no longer a viable option for many on account of low acceptance rates.

Alternative finance has jumped to fill the gap, offering small firms a more innovative attitude and community-driven environment. Many of the consequent financial practices, such as crowdfunding and peer-to-peer funding, have recently been exposed to intense scrutiny and have demanded urgent regulation.

Mike Cherry, FSB national chairman, said: "We need to see a fundamental shift in the UK's small business finance culture. Too many firms are reluctant to borrow and realise their full growth potential. Those that do are too reliant on traditional debt products.

As small business sentiment sours towards high street lenders, the finance gap has widened. New financial platforms will continue to arise, offering a range of innovative methods to relieve the day-to-day strain of business finance. Modernity does not necessarily precede financial security, and businesses should focus on the strength of their cash flow rather than a quick injection of cash.

At the Credit Protection Association, we have always championed the management of strong cash flow, as well as the shrewd assessment of risk. Our comprehensive credit assessment service provides our Members with the credit checks, status reports and directorship databases, to protect them from poor business practices as well as reduce the need for costly credit altogether.

Please call us on 0330 053 9263 to discuss how CPA can help your cashflow.
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The Latest Insolvencies to 08 Aug 2018

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