Commenting on the latest Bank of England figures Louise Beaumont, Head of Marketing & Public Affairs at GLI Finance said:
“Despite today’s figures from the Bank of England highlighting that overall lending to SMEs grew in February, they conceal the longer term problems that SMEs have faced. Data from Funding Options highlighted that, since 2011, SMEs have had £5.7m withdrawn a day in small business overdrafts alone cutting available credit by a staggering £8.4bn, a drop of 40% in four years.
Furthermore, the FSB highlighted earlier this year that fewer firms are even applying for finance now because they are concerned about having their existing overdraft removed, while a recent report from the British Chambers of Commerce showed that SMEs have very little understanding of the alternative finance options available to them.
It is clear more needs to be done to create an environment in which SMEs can thrive in order to allow them to access the finance they need to grow. Our recent report produced in conjunction with the University of Cambridge in November 2015 highlighted just how valuable SMEs are to the UK economy. According to the report, raising awareness levels amongst SMEs of options available through alternative finance could add up to £20 billion to the UK economy by 2020.
The UK Government has made progress in raising the profile of alternative finance as a complementary force in the financial services landscape by implementing supportive legislation and regulation. Indeed the recent decision by the British Business Bank to recommend Funding Options to go forward for designation by HM Treasury for the Bank Referral Scheme was a major breakthrough. It is now crucial that the Government continues to build on this momentum by working closely with the industry and key stakeholders to ensure SMEs are aware of all their options for accessing finance.”