Small Businesses Reluctant to Approach Banks
The Business Banking Study, carried out by Charterhouse Research, has shown that small businesses seem to be reluctant to approach the banks when it comes to seeking finance. Over the last 12 months, only a third of businesses (whose turnover is under £1bn) have sought some form of finance from banks.
Mark Dennis, director at Charterhouse Research, said: “In a market where businesses seem to be crying out for help, only the minority appear to be reaching out to the banks for funding. We believe there is a blanket perception that banks are simply not lending, particularly among start-ups and smaller firms, so they’re not even putting in the request. Yet our study also shows that the banks are indeed lending, with the majority of applications in 2010 being granted in full, so there is a mismatch between reality and perception.”
Some of the key elements to the Business Banking Study are as follows:
“Our research suggests that for some businesses at least the issue is more about negative expectations than a genuine lack of funding. Therefore, perhaps start-ups and smaller businesses need greater support and help in knowing exactly what their funding options could be,” continued Dennis.