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More than quarter of UK SMEs have trouble accessing finance from main bank, says research

The research, commissioned by embedded finance and payment fintech Sonovate, found a trend towards SMEs being unhappy with their main bank but benefiting from services offered by alternative lenders.

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More than a quarter of UK SMEs say they have had difficulties accessing finance from their main banks, according to new research.

The research, commissioned by embedded finance and payment fintech Sonovate, found that 26 per cent of firms surveyed had trouble accessing finance from their bank while over a third (38 per cent) say their main bank doesn’t understand their business needs.

Another finding was that around two in five businesses (41 per cent) think banks’ lending policies haven’t kept pace with modern business needs while 35 per cent said that banks provide them with no other service or support beyond lending.

The findings follow a recent announcement by the FCA warning banks to improve their treatment of small business owners after a  review found ongoing instances of lenders treating small businesses unfairly over several issues including ensuring fairness.

On the other hand, those surveyed recognised the benefits of using non-traditional banks. 

For example, over a third (37 per cent) of businesses surveyed say that alternative lenders make it easier to access funding .

Additionally, around three-quarters (76 per cent) say that invoice financing tools have greatly benefited their business, with around two-thirds (64 per cent) citing faster transactions and business processes as key advantages.

But only five per cent surveyed secured a loan or accessed invoice finance from an alternative lender in the past 12 months.

Amid the current cost of living crisis, the survey found, 27 per cent of businesses admitted to taking more than 90 days to pay contract staff while 44 per cent of small business leaders expect to accelerate their finance plans in response to the prospect of further rate hikes that the Bank of England is expected to implement in the coming months.

Richard Prime, co-founder and co-CEO at Sonovate, said: “It is evident that business owners across the country are struggling to access finance through traditional means.

"On the whole, banks and mainstream lenders have not kept up with the needs of today’s businesses, and lack the agility, scalability and speed to provide organisations with critical funding.

“Alternative finance is perfectly positioned to plug this gap, and provide business owners with a lifeline through what is an incredibly challenging period, where funding is likely to be needed more than ever to grow the business.

"With the rate hike looming, now is the moment for businesses to consider all their options and make a decision that is right for the organisation in the long-term.” The survey was conducted by Opinium, the market research firm, on behalf of Sonovate, and surveyed 500 senior decision makers at small and medium-sized enterprises.

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Richard Prime

Co-CEO and Founder


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