Almost two thirds (65%) of SME owners have reported feeling penalised by their traditional finance providers as a result of poor trading during the recession, according to research conducted on behalf of ABN AMRO Commercial Finance. The research, conducted in August 2012, surveyed 250 SME owners, managers and financial controllers, more than half of whom (55%) reported suffering poor performance figures during the recession.
These findings suggest many UK SMEs still face a significant challenge in accessing the finance they need in order to grow. “Many good businesses suffered tough trading during the recession, but when this starts to affect access to finance it’s a big problem,” says Peter Ewen, Managing Director of ABN AMRO Commercial Finance. “Most traditional lenders are still assessing businesses based wholly on their past performance, but this approach is increasingly irrelevant today.”
According to the research, many businesses insist that their recent historic accounts are not an accurate reflection of their current potential. Two fifths (41%) of respondents said that these assessments fail to acknowledge their current activity and thus underestimate their potential for growth. Peter Ewen has called for the finance industry to re-evaluate their funding criteria. “We need to take a long hard look at alternative finance available and the way in which businesses are being assessed for that funding,” he says. “If we restrict businesses for surviving the global economic meltdown, then the future of British business is bleak indeed.”