Third of SMEs won’t survive without access to finance
A third of small- and medium-size enterprises (SMEs) believe that they won’t survive the year without access to finance.
According to a new survey from financial comparison website NerdWallet, 41 per cent of SMEs said that finance has become less accessible than it was a year ago.
33 per cent of business owners said they will fold their business by the end of the year without further funding, while another 32 per cent said that they have no financial plan in place to sustain operations over the next 12 months.
31 per cent of UK SMEs applied for at least one form of business finance during the first half of 2022, but one fifth (20 per cent) have had a finance application rejected, despite having a good or excellent credit score.
“From the pressures of Covid-19 to soaring inflation, it is unsurprising that so many need to access finance to maintain operations,” said Connor Campbell, a finance expert from NerdWallet.
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“It is worrying, therefore, that a significant proportion of SMEs are finding it increasingly difficult to access such resources.
“However, SMEs must not feel disheartened. While they may feel as though traditional banks are less willing to lend money, there are still a lot of alternative options available for them to consider.
“Peer-to-peer loans, invoice financing, and equipment financing are all potential options that can provide vital resource to keep operations running.”
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Campbell added that the coming year is likely to present many more challenges for SMEs, which makes it even more important to ensure that they have adequate access to funding resources.
He said that alternative financing options will be a vital lifeline for these business owners.
“There are plenty of options beyond the traditional finance routes,” Campbell added.
“The key for SMEs is to remain flexible and open minded. In doing so, they should be able to develop a sustainable finance plan that not only helps them weather the current economic storm, but allows their business to grow in the years to come.”
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