Finance Praseeda Nair · 13 March 2017
Lack of finance continues to prevent small business growth
Almost one in five small UK business owners have missed out on a sales opportunity in the last year due to lack of finance, new research has revealed, a 50 per cent increase in one year. According to a study by challenger bank Aldermore, lack of finance costs the average small company 77, 651 in lost business opportunities every year, as owners struggle with limited cash flow. The research indicated a reliance of traditional lending in financing small companies. Bank lending, through overdrafts and credit cards, was found to finance 18 per cent of the average small business. The findings suggest that access to appropriate methods of finance is getting worse for small firms. In December 2015, for example, a lack of finance meant a lost business opportunity for just one in ten small business owners. Alternative finance was found to make up a growing portion of the small business lending market, with invoice finance, crowdfunding and asset finance now representing 14 per cent of all finance accessed by small UK companies. However, further research has suggested that awareness of alternative options remains low among small business owners, with just three per cent of those rejected by a bank going on to seek alternative finance. Commenting on the research, Carl Dammassa, a business finance director at Aldermore, suggested that better education over available options would support accessibility and create better finance opportunities for small businesses.
ABOUT THE EXPERTPraseeda Nair
Praseeda Nair is an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.