In response to the survey, Forum of Private Business Chief Executive Phil Orford echoes the CreditPal message that “by ensuring they approach their banks armed with proper management accounts and financial projections, entrepreneurs can significantly boost their borrowing prospects”.
Managing cash flow and Government red tape and lack of lending facilities were highlighted as some of the main challenges faced by today’s businesses in the annual IFA Business Barometer Survey.
The Survey, by the Institute of Financial Accountants (IFA), which will be released on 24th June, canvassed the opinions of IFA members. The IFA currently has over 10,000 members.
Questions focused on the plight of small businesses in post-recession UK. The challenges businesses claim they are facing include:
attracting new business/clients
finding and affording good staff
rising taxes
HMRC bureaucracy and poor service, online and by telephone, taking up non-chargeable time.
Competition from companies providing extremely low quotes.
Finding lenders – banks frequently refuse reasonable lending applications.
George Derbyshire from National Federation of Enterprise Agencies said:
“There is no question that a thriving small business sector will be central to economic recovery, and the IFA and its members are uniquely well-placed to test the temperature of the sector. The findings of the Barometer Survey provides an agenda not only for the Government, but for all of us who work to support small businesses.”
IFA Members were asked what their experience was of the willingness of banks to lend. Only 2.6% said they were ‘very willing’. Whereas almost 37% said they were unwilling and a resounding 25% claimed to be ‘very unwilling’.
The general feeling is that banks are too risk averse. They are not flexible and SMEs are finding it almost impossible to obtain credit. When banks do lend it is always accompanied by strict personal guarantees, excessive charges, bigger deposits, and shorter loan periods.
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