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The changing face of SME finance

SIMPLY THE CHANGING FACE OF SME FINANCE FACTORING BROKERS BRITAIN IS 'OPEN FOR BUSINESS', ACCORDING TO THE UK GOVERNMENT - YET IT CAN FEEL ANYTHING BUT FOR THE MANY SMALL AND MEDIUM-SIZED BUSINESSES STRUGGLING THEIR WAY THROUGH THE RECESSION... THERE ARE 4.5 MILLION SMES IN THE UK PERCENTAGE OF SMES APPLYING FOR A BANK LOAN PERCENTAGE OF SMES APPLYING FOR AN OVERDRAFT BANK 44% 40% 26% 35% 2007 2010 2007 2010 > THE BORROWING OPTIONS AVAILABLE TO SMES SME'S SEEKING INVOICE FACTORING HAS HAVE CHANGED DRAMATICALLY SINCE THE DOUBLED START OF THE ECONOMIC DOWNTURN. THE COLLAPSE OF SEVERAL LEADING BANKS MEANS THERE ARE FEWER LENDERS, AND THOSE THAT INVOICE REMAIN ARE FAR MORE CAUTIOUS THAN THEY USED TO BE. AS A RESULT, SMES - VIEWED AS RISKIER INVESTMENTS THAN LARGER INVOICE COMPANIES AS THEY HAVE FEWER ASSETS AND LESS SECURITY - ARE EITHER REJECTED FOR LOANS IN THE FIRST PLACE OR ARE OFFERED SMALLER SUMS THAN APPLIED FOR, LEADING 2007 2010 TO FUNDING SHORTFALLS IN BUSINESS PLANS. SUCCESS OF FINANCE APPLICATIONS 2007 2010 90% 74% SUCCESSFUL REJECTED DON'T KNOW PERCENTAGE OF SMES REJECTED AT FIRST FUNDING SOURCE 5.39% NOV 2008 26% BANK OF ENGLAND INTEREST RATES 52% 49% FOR VARIABLE RATE LENDING 2007 2010 2012 3.5% > SMALL BUSINESSES ARE VITAL FOR THE ECONOMY, PARTICULARLY LOCAL ECONOMIES. IF SMALL FIRMS NOV 2011 ARE UNABLE TO EXPAND AND DEVELOP, THEIR COMMUNITIES FEEL THE KNOCK-ON EFFECT... £1 £1 FOR EVERY £1 SPENT ON AN SME, 63P GOES BACK INTO THE LOCAL ECONOMY. IN COMPARISON, ONLY 40P OF EVERY £1 SPENT ON A LARGER FIRM IS SPENT LOCALLY. THE GOVERNMENT HAS PROMISED TO HELP BUSINESS GET BACK ON ITS FEET, INTRODUCING A NEW EMPLOYMENT ALLOWANCE TO REDUCE NATIONAL INSURANCE CONTRIBUTIONS (NICS) AND CREATING THE BUSINESS BANK TO RAISE AWARENESS OF ALL FINANCE OPTIONS. FROM NEXT YEAR, 450,000 SMALL BUSINESSES WON'T HAVE TO PAY ANY EMPLOYER NICS, AND CORPORATION TAX WILL DROP TO 20% BY 2015. > SOURCES Department for Business, Innovation & Skills (BIS) Small Business Survey, BIS SME Access to Extermal Finance Big Innovation Centre: Credit and the Crisis – Access to Finance for Innovative Small Firms, Federation of Small Businesses > IF YOU ARE LOOKING FOR AN ALTERNATIVE TO TRADITIONAL FORMS OF BUSINESS CREDIT, GET IN TOUCH WITH SIMPLY FACTORING BROKERS ON 029 2086 3213 TO SEE IF SIMPLY INVOICE FACTORING IS RIGHT FOR YOU... www.simplyinvoicefactoring.co.uk FACTORING BROKERS 000 D00

The changing face of SME finance

shared by fairhillonline on Aug 30
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An infographic of how small and medium sized businesses have fared with borrowing in the last few year.

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