New statistics indicate there’s still work to be done to help small business owners close the gap between their business ambitions and realistic expectations.
A recent survey conducted by Advanced Payment Solutions Ltd, found that, 36% of business owners have been declined in their application for a High Street business bank account.1
Furthermore, responses suggest that the lack of available lending to SMEs in the UK remains a major concern for business owners, with 62% of respondents indicating that limited access to credit was the biggest gap in their primary business bank account.
The main reason behind wanting to secure funding, was to assist in the management of start-up costs, just ahead of cash flow and working capital, according to the survey.
Corresponding to this, the survey found low levels of confidence in abilities to maintain cash flow, which was impeding the likelihood of reaching business goals.
SMEs represent an estimated 99% of all private sector businesses, and their estimated gross value equates to 49.8% of the UK economy.2 Despite the value small businesses add to the UK economy, there has long been a lack of tailored products and solutions to meet the growing needs of this group, largely due the perception of it being a ‘high risk’ market.
It’s widely recognised that High Street Banks aren’t geared toward SME lending, and a new study by Angels Den reinforced this, finding that 59% of start-up businesses surveyed were rejected for a bank loan, with limited business experience a key factor in hampering approval rates.3
In light of recent reports of new economic growth and increased consumer spending4, UK financial service providers need to increase the levels of support they offer SMEs, to help them take of advantage of this opportunity for business development.
In efforts to close this gap and turn the ambitions of more SMEs into a reality, Cashplus sought a partnership with leading UK bank and lender, Shawbrook earlier this year. Through this partnership a further £2.5 million has been invested in lending capital.
This investment will allow APS, via the Cashplus Business Account, to extend business financing to more SMEs in the UK. This initiative will aid the cash flow concerns of numerous businesses, and allow more business owners to react to new opportunities and help them to thrive.
1Source: Advanced Payment Solutions Ltd, Survey of SME’s (August 2014)
2Source: http://www.parliament.uk/business/publications/research/briefing-papers/SN06078/small-businesses-and-the-uk-economy (June 2014)
3Source: http://realbusiness.co.uk/article/27680-three-fifths-of-startups-have-tried-but-failed-to-get-funding (September 2014)
4Source: http://www.telegraph.co.uk/finance/economics/11020845/UK-consumer-confidence-outstrips-rest-of-the-world-study.html (August 2014)
About Advanced Payment Solutions Ltd (APS)
With over millions of cards issued and more than billions in payments processed, APS is one of the world’s most innovative payment solutions companies and one of the most awarded card providers in Europe. The company has grown from launching the UK’s first and best known general purpose prepaid card for consumers, to providing businesses and local councils with digital and mobile banking solutions.