BBA statement on the publication of the SME Finance Monitor
The BBA welcomes the publication of the first set of data from the SME Finance Monitor, the most extensive regular survey of SME finance yet undertaken in the UK.The BBA welcomes the publication of the first set of data from the SME Finance Monitor, the most extensive regular survey of SME finance yet undertaken in the UK.
The new independent research found that most SME’s seeking finance from their bank over the last year had their loan applications approved. But banks are not complacent which is why the major high street banks are putting more measures in place to help those customers looking to access finance.
Better Business Finance – an initiative from the major high street banks – seeks to provide help and support for SMEs with specific guidance on preparing the best case for credit as well as signposting other ways to raise finance. MentorsMe, launched last week, is a national mentoring programme aimed at supporting businesses and address the nine out of ten business the SME Monitor found which did not seek any help or external guidance when applying for a loan.
The SME Monitor also chimed with the BBA’s findings, that many of those considering borrowing were put off from doing so by the economic climate. Businesses which did not apply to borrow either did not need finance or were put off because it was either the wrong time for them or they had concerns about the principle of borrowing.
The survey also highlights the importance of a strong continuing relationship between the business and its bank. Customers with a good track record and a sound credit rating found borrowing easier.
The British Bankers’ Association said:
“Today’s results from the SME Finance Monitor are encouraging and show that most business are able to get the credit they need and that customers with a good track record and sound credit history find the process straight forward. It clearly pays to have a strong, ongoing relationship with your bank as existing customers were rarely turned down.
“The picture is also complex with many customers clearly still concerned about the economic climate and so are less inclined to borrow. Meanwhile, pay back of existing finance facilities remains strong.
“However some businesses are concerned about the process and we will address this issue. We are working to help SMEs access the finance they need. Better Business Finance aims to help business prepare their case for credit as well as signposting other ways to raise finance. The new mentoring scheme – MentorsMe – is there to help the nine out of ten businesses which currently seek no external help when looking for finance.
“Confidence comes through as the vital element for the SME community if they are to invest and grow. All parties – banks, businesses, representative bodies and government – need to use the solid evidence from this ongoing survey to develop policy. Banks are committed to providing SME’s with greater and easier access to finance.”
The SME Finance Monitor was designed specifically to find out what demand there was business credit. 81% of SMEs have neither applied for or renewed their lending, and their bank had not asked them to renegotiate. Of those who applied, 85% of overdraft applicants were successful in getting an overdraft, and two thirds of loan applications were approved.
Today’s results are the first step in establishing the full picture of the demand for SME finance. They should be seen in the round and will, over time, provide the most comprehensive picture of SME ending intentions ever undertaken. The SME Finance Monitor is the most extensive regular survey of SME finance yet undertaken in the UK, with 5,000 businesses across the range of industry sectors and regions interviewed every quarter.
Note to Editors
1. The SME Finance Monitor is independent and carried out by BDRC Continental. Media queries about the survey should be addressed to Greenfields Communications :
2. Results can – from 13:30 hrs 11 July 2011 – be found at: http://www.sme-finance-monitor.co.uk