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UK SMEs struggle finding investment

by LLB Reporter
12th Dec 17 10:23 am

Here’s why

UK SMEs are struggling to find adequate funding to invest and boost their productivity, according to research by Close Brothers Group.

Just 41 per cent of UK SMEs have been able to access capital through their chosen funding route, andeven those able to secure some form of funding have faced challenges. Of those UK SMEs who received funding – whether via banks, personal loans or specialist lenders – 34 per cent felt that it wasn’t enough for their investment plans. A further 24 per cent felt that the type of funding they had used was too expensive.

Access to sufficient capital is vital for businesses looking to grow and expand. Funding is needed for staff training, investing in new technologies, expanding product lines or renovating premises; all of which can help increase productivity levels, and subsequently a company’s bottom line. However, many SMEs are unsure how to deploy capital they have borrowed. 26 per cent of those who secured finance were uncertain how best to use the funding they received. This would indicate many require additional support, ensuring the products and finance they are receiving from their lender is aligned to their business’ goals and strategy.

Close Brothers’ research also revealed that the difficulty in accessing finance was not limited to the UK. 16 per cent of SMEs across the UK, Germany and France are unable to access enough capital at all, from any source, and 4 per cent of SMEs were unsure where to access the finance they needed to invest in their business. German SMEs were better able to access funding than their UK peers, while French SMEs were less able to do so. Just 33 per cent of French SMEs have been able to access capital through their chosen funding route, compared to close to half (47 per cent) of German SMEs.

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