January 2014

SMEs still struggling to get business funding

Small businesses seeking funding are struggling to borrow cash affordably, despite the Bank of England‘s attempt to boost finance in the SME sector. According to the Bank of England, lending figures showed that businesses paid back £4.3bn more than they had originally borrowed in the last quarter.

SMEs were the worst affected – the Funding for Lending scheme, which lends to smaller businesses, gave £2.3bn less in loans since the scheme started, according to the public accounts committee. This was also confirmed by the recent drop confirming that lending to businesses is currently at a 32 month low.

Here at Business Funding, we look at alternative ways of helping your business get funding. Even if you’ve been rejected from the bank, we still recommend you come to us if you’re business is looking for loans. Our partners work around the clock to get you funding for your business, at very competitive rates. Not sure what type of funding you need? Use our fund finder here.

Bankers are optimistic for business lending in 2014

According to Ernst and Young’s Barometer survey, senior British bankers are optimistic about bank lending and good economic conditions in 2014 (76% in comparison to a Europe-wide figure of 56%). After the US, the UK was predicted the highest an upturn in business lending in 2014. 

Despite the Bank reporting a record £4.7 billion contraction in net business lending in November, senior bankers are upbeat about business funding this quarter. Omar Ali, head of UK banking and capital markets at EY, said: “As the wider economic recovery continues to gain pace, banks are more confident to lend to both consumers and companies alike. 

After years of tight credit restrictions, banks are now able to be more bullish in their attitudes towards lending.”

To find out more about the different types of funding offered to businesses, visit our site.

Bridging the Gap: How businesses can benefit from funding

Businesses are increasingly benefitting from receiving funding to accelerate their growth. Without working capital, businesses may struggle to pay for the day-to-day transactions to keep afloat.

Andy Jones, from Kev Jones & Sons received £45,750 from Solent LEP last April to extend their shop in Portsmouth. Andy said without the funding, it could have taken five to 10 years for the business to raise the money. The 36-year-old said: ‘The Bridging the Gap fund is a great opportunity for small businesses which might not be able to raise the money they need to move forward.

‘There isn’t always a lot of funding out there for small businesses so this is a great chance for them to get money. We used it to expand one of our stores and the work was finished in a few months.

‘If we didn’t have that money, it would have taken so much longer to raise the money ourselves.’

The Bridging the Gap Growth Fund exists for Small and Medium Enterprises (SMEs) to provide support for future economic development in local areas. To find out about different types of funding that may be available for your business, visit, .

UK suffering from 'long-term, structural failure in business finance'

The director of the British Chambers of Commerce (BCC) recently announced that the UK has a ‘long-term, structural failure in business finance in the UK’. 

BCC director John Longworth said that small firms struggle to access the necessary working capital and development capital to grow small businesses. He has urged the government to address the issue to allow for more Funding to Lending Schemes and skew lending towards small and medium sized enterprises based in the UK.

Mr Longworth however outlined five key ways to boost investment in the UK:

  • Nurture business confidence
  • Address the structural failure in business finance
  • Relieve firms from the ‘cost of doing business crisis’ in the UK, which includes rising business rate bills and energy cost
  • Delivery of infrastructure projects already promised, so that companies are confident they will be able to trade the world
  • Better availability of skilled workers

This year, Bank of England director for markets Paul Fisher also said that there had been reduced SME business lending in 2013. Despite an economic recovery following the banking crisis, he said that ‘credit supply to businesses remains relatively subdued’.

However, there are many different ways to raise finance for small businesses. From bridging loans, invoice discounting and working capital finance, to bigger business loans or equity investment, here at business funding we have a team of partners dedicated to getting funding for your business.