Over half region's SMEs turned down for funding

New research by OnePoll, commissioned by small business funder Liberis, shows that half of the region’s small and medium sized businesses who applied for bank funding were turned down. As a result, 54% suffered cash flow problems and 45% missed an important business opportunity.

The decision impacted owners/managers personally too with 45% saying it increased their stress. Twenty seven per cent of respondents said it made them angry.

However, North West businesses are savvier about alternative funding options than the rest of the UK, with the exception of London and the West Midlands. Fifty nine per cent sought alternative funding, compared to 55% of businesses nationally. That said, a third of businesses who didn’t seek alternative finance sources said they assumed that alternative lenders would turn them down too because the bank had.

Forty five per cent of respondents (45%) wanted the funding for business development followed by cash flow and new stock respectively (27%). Cash flow management was cited as the biggest business worry by businesses.

Commenting on the findings, Liberis CEO Paul Mildenstein said, “The economic crisis has created many new and innovative funding sources for small businesses and it’s great that North West businesses are accessing these. There are still a lot of businesses who aren’t so well informed however and we need to change that, so they can access the working capital they so need.”

Respondents were also interviewed on the personal sacrifices they make for their businesses and the region’s SMEs were above the national average when it came to family holidays and personal savings.

Two in five (40%) said they had sacrificed family holidays, compared to a national average of 34%. And 38% had sacrificed their personal savings, compared to just 28% nationally.

Forfeiting quality evening/weekend time with their families was a little under the national average with just over a third (34%) reporting they had done so. Sacrificing a relationship, resulting in break up or divorce was on a par with the national average at 12%.

Liberis is the latest member to join the Alternative Business Funding collaboration, which is consulting with the government on how to improve access to finance for SMEs following commitments made in the March 2014 Budget. Its finance portal aims to help SMEs requiring non-bank funding solutions alternativebusinessfunding.co.uk