Big bank lending policy still selling SMEs short?

Big bank lending policy still selling SMEs short?

Unemployment may have fallen and inflation may have dropped in June, but confidence in our economy clearly remains low. Results from a recent survey on small business lending have underlined this fragility. The question is: what can these companies do?

Big bank lending to SMEs has long been a key issue for the government, not at least as it has singled out these companies as central to reviving the economy. However, a survey by research consultancy BDRC Continental will cast more doubts on this strategy and, in particular, the performance of Project Merlin.

According to the report, small businesses are still suffering from a lack of lending support from the big banks. As well as citing failure rates for overdrafts and loans, perhaps more importantly, it highlights a fundamental reluctance among a significant number of SMEs to apply for credit. Why are SMEs feeling discouraged? According to the report, the current economic climate, the cost and time involved and a fear of losing control of their businesses are the main reasons.

So, where do these companies go? What alternatives are there to traditional bank lending? Selective invoice discounting is one: a new form of invoice finance, it is fast growing in popularity, allowing businesses to release funds from single invoices on an invoice-to-invoice basis without having to commit to ongoing or long-term contracts.

The economy is at a vital juncture. If SMEs are to play the role the government wants them to, more help is undoubtedly required. But these companies can also help themselves by making use of invoice finance services such as selective invoice discounting.

To find out more about Tandem Invoice Finance services, contact us on 0845 618 8515 or info@tandemuk.com.