Decrease in SMEs seeking external finance

The demand for external finance by SMEs is falling, with only 12% of SMEs using external finance in 2018. Research by the Department for Business, Energy & Industrial Strategy (BEIS) shows a clear downward trend in SME employers seeking external finance since 2010.  

In addition, research by BEIS has shown that micro and small businesses were more likely to get loans from family or friends as oppose to other forms of external finance. This indicates the reluctance of small businesses in applying for loans due to economic certainty in the current political environment. Despite this, research shows that 20% of employers said they would be likely to approach external finance providers in the next three years.

Many SMEs are unaware of the financing options available to them, which could be a reason behind the lack of SMEs investing in external financing options. A great deal of reluctance to apply for external finance is produced from lack of trust. Due to the nature of SMEs, the smaller amount of funding and lack of assets means that it is trickier to receive loans. 

For this reason, the Enterprise Finance Guarantee scheme (EFG) is a great option for SMEs, as the government act as guarantor for the business, accepting most losses that may occur. 

Skipton Business Finance is an accredited lender of the EFG scheme.  We offer EFG loans to SMEs, which run alongside an Invoice Finance facility. Being part of Skipton Building Society, our ethos is that we encourage the growth of small business by offering Invoice Finance, including Invoice Factoring and Invoice Discounting


Visit here for more information on award-winning finance solutions from Skipton Business Finance or call us on 0800 0854150 (or 0330 1232437 from a mobile).