Banks fail to properly understand needs of small companies
Just a fifth of small business owners feel that banking advice from their lender consistently meets company needs, as new research showed the extent to which barriers to finance remain for small UK enterprise.
A survey undertaken by merchant bankers Close Brothers that took the views of 1, 000 small business owners found that 46 per cent of the owners of small companies had encountered barriers finance and business support from mainstream banks.
Key problems highlighted by the studywere that lenders failed to provide effective advice relevant to the specific industries of small businesses.
Over a fifth of respondents who had experienced barriers to finance believed that their individualneeds were not understood by their lender, while a quarter believed that an understanding of their business sector was absent.
Commenting on the outlook of company owners, CEO of Close Brothers commercial division, Adrian Sainsbury, suggested that access to appropriate levels of finance and advice remained an issue for UK enterprise.
‘smaller businesses do not have the same options as larger companies. it’s clear that the traditional sources of advice for many are no longer sufficient, he said in a statement.
Sainsbury added that bankshad failed in understanding the ‘specific circumstances? of small firms, meaning they are not receiving the level of support they need to secure the right products and funding for the future.
He concluded by calling for a ‘specialist, rather than a generalist? approach to small business lending from banks.
it is vital that these companies are properly understood by the mainstream funders they turn to for guidance, whether knowing the specific financial needs of that business in a particular sector, or identifying the type of lending that will best suit their business at any given time.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
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