New research has revealed that over half of UK businesses are unable to access the funding needed to grow; with the main hindering factor being a lack of education or understanding of their funding options.
With falling SME confidence in the economy and mounting concerns over costs given the relative weakness of the sterling, alternative finance provider Liberis strongly urges the UK to better support its small business community.
The lifeblood of the UK economy, SMEs contribute more than £200bn a year; with this number expected to grow by almost 20 per cent by 2025. Yet, without a vital cash injection, this 2025 vision will be severely stinted.
Hindering growth opportunities, this lag in SME development may in turn negatively impact the economy. It is crucial to ensure better understanding on how to navigate the perceived minefield of funding options. Small business education is desperately required to increase awareness levels of the process; greatly benefiting both businesses and economy alike. Such movement has been reinforced in a recent report from the British Business Bank, in which the UK Government backed organisation pledges its dedication to a more targeted educational campaign on the topic of SME finance.
While 62 per cent of UK SMEs said they need funding to grow and expand, but 57 per cent of SMEs were unsure which provider to obtain funding from and 53% did not have a set amount in mind when looking to access finance.
Liberis found 22 per cent of businesses require funding to maintain business as usual, while 5 per cent need funding to survive past the first year of business. Speed of funding has been identified as integral to achieving this growth. Other findings of the report showed an increase in the popularity of crowdfunding as a source, with 10 per cent of UK SMEs looking to use this as a means for funding in the next two years.
Commenting on the report, Rob Straathof, CEO at Liberis, said: ‘These findings have opened our eyes to a lack of confidence and awareness among SMEs in how to correctly secure the funding they so desperately need. Funding will continue to be a hot topic for the small business community, but urgent action and collaboration is crucial to prevent resulting damage to the UK economy. Without sufficient financial education and support, the UK’s business ambitions will be severely affected but by ensuring they have the correct financial understanding, we can help secure and strengthen their livelihood; fast-tracking their ambitions.’