ARCHOVER’S chief executive Angus Dent (pictured) has urged small business owners to be more confident in taking on debt, after new figures showed that 80 per cent of small- and medium-sized enterprises (SMEs) are refusing to apply for new finance.
The latest SME finance monitor from research firm BDRC Continental showed that Brexit-related uncertainty is making the majority of small firms reluctant to borrow money.
The boss of the peer-to-peer business lender said that while their caution was understandable, it is the “wrong attitude” for SMEs that want to scale up.
“Too many SMEs are using their own life savings to fund their business or see the bank as their first port of call when they need to raise money,” he said. “Instead, we need to do more to educate SMEs on how they can use their greatest asset – the general ledger – to secure other forms of finance.
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“SMEs also need to be more confident in considering alternative finance providers that offer a more flexible and personalised service. Fixed-term financing makes access to funding easy and simple and gives SMEs the cash flow security that can support future expansion.
“The UK economy depends on a booming SME sector, and finance is the bedrock of growing a small business. Rather than relying on sluggish, nervous high street banks, SMEs need access to flexible cash facilities.”
Various surveys have highlighted growing uncertainty from small businesses in the wake of the Brexit vote. Last month, P2P business lender Funding Circle found that more than two thirds of SMEs that import goods and services expect costs to increase after Brexit.