UK small businesses are turning away from traditional bank financing options – just 16.2% of firms applied for traditional bank financing options during the past three months, according to the latest research by the Federation of Small Businesses.
Commenting on the figures, Simon Carter, Director Touch Financial leading commercial financial brokers, says: “The number of companies applying for bank loans are the lowest since 2012. Getting a bank loan can be as difficult as panning for gold.
“Companies are attracted to invoice financing by the lack of red tape and fast access to cash based on invoices that have yet to be paid. They don’t have to wait for the customer to cough up the cash, they can get cash when they raise an invoice.
“All the signs are that the economy is recovering with small companies across the UK continuing to show increasing optimism for 2014. Businesses want to grow, but banks are not lending,” says Carter.
“The Bank of England figures for last month showed that bank lending to small and medium sized businesses shrank by £505million. It’s a situation that is driving companies to look at alternative cash flow solutions such as invoice financing.
“Businesses should not be struggling to raise finance – they need funding now if they are to fully exploit business opportunities.”
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