Knowledge of the different funding options available for businesses is low, despite over half applying for finances in 2015.
A British Chambers of Commerce (BCC) survey of 1000 businesses shows that many have “significantly” lower awareness of financial products such as P2P funding and trade finance, as compared with traditional products such as loans and overdrafts.
93% of firms were familiar with bank overdrafts, while 19% were aware of mezzanine finance as a potential option for them.
Further findings from the survey:
- 48% applied for finance in the past 12 months
- firms were most familiar with bank loans (88%), commercial credit cards (86%) and leasing/hire purchases (86%)
- angel finance (38%), P2P lending (42%) and trade finance (46%) were the least familiar
- 54% who secured finances rejected terms offered due to higher interest rates.
Dr Adam Marshall, acting director general of BCC, said:
“At a time of transition for the economy, government help can play an important role. So there is work to be done to raise awareness among businesses of schemes such as the British Business Bank, which was set up by the government to make finance available to firms via banks and alternative lenders to promote business growth.”
David Postings, global chief executive of Bibby Financial Services, added:
“Traditional sources of funding still seem to be the first port of call for many SMEs, but there are a growing range of options available and it’s important that businesses consider forms of finance that fit their own requirements.”