- 03 Jan
Banks Declines 2 Out Of 10 SME Finance Applications
Figures from UK Finance show that in Q3 2018 banks turned down 2 out of every 10 applications for finance, from SMEs.
Rejected For A Bank Loan Or Overdraft?
Whilst the press release from UK Finance focusses on the 69,980 of new loans and overdrafts approved to the value of £7 billion, in Q3 2018, the approval rate of 8 out of 10 means that there are a huge number of SMEs not getting the finance that they need. Using these numbers, that could mean more than 17,000 UK SMEs not being approved for the loan or overdraft that they need.
The notes to the press release confirm that SMEs are considered businesses turning over less than £25 million per annum, and that the update relates to the business of mainstream SME financing banks in Great Britain & Northern Ireland, which represent c. 60% of all debt finance for SMEs in the UK. If these figures were to be extrapolated to include the remaining 40% of the market, assuming a similar approval ratio, that would point to over 28,000 SMEs not getting the funding they need.
Most businesses that need funding go straight to their own bank, and never look any further around the market. This means that they never see some of the flexiblty, low cost offerings from reputable alternative lenders.
Alternative Finance If Rejected By Your Bank
If you have been rejected by your bank, you will be pleased to know that in the UK there is a healthy alternative finance market that seeks to serve these customers that have been declined traditional bank finance.
Our team at FundInvoice operate within that niche, and have had a great deal of success helping customers that have been declined elsewhere. We have a 97.5% success rate in finding facilites for applicants.
There are plenty of alternative lenders that may be able to take a more flexible approach to lending, either via traditional facilities, such as a business loan, or other options such as receivables financing. It is highly likely that we will be able to find you the funding that your company needs.
In many cases the funding will be from household names that you will be familiar with, for example, Hitachi Capital, Close Brothers (the FTSE 250 merchant bank) or Skipton Business Finance (part of Skipton Building Society) - to name just a few.