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Time for SMEs to think differently about finance

Who’s telling the truth? SMEs that claim the banks are not making enough commercial finance available, or the banks that tell us that their doors are open and there is plenty of funding on offer for small businesses? Key data would suggest the former argument carries more weight, but the standoff over small business finance shows few signs of coming to an end.
A study of high street bank attitudes to business banking in the weekend’s Financial Times revealed a significant degree of prudence and caution in terms of lending, but at the same time a strong willingness to provide other types of help, such as networking, seminars and mentoring. Such findings point toward a clear divide between talking about small business finance and delivering it, and it seems that how to bridge this gap is what is causing the friction.
One response to the shortfall in conventional commercial finance, put forward recently by John De Groot, chairman of Success Strategy, is that Britain’s entrepreneurs should be prepared to borrow money from friends and family to help fuel business growth. While looking outside of the conventional lending framework is a smart move, this particular strategy appears fanciful at best and irresponsible at worst.
Alternative commercial finance services, such as invoice discounting and factoring and lease and asset finance, have a stronger footing and offer SMEs a means of meeting two key challenges: raising capital and maintaining cash flow. A prolonged standoff between banks and business is not the answer, so perhaps it is time that more small business owners looked beyond traditional business lenders in search of commercial finance. SMEs would be the winners.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk


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