BUSINESSES that get external support are up to 25 per cent more likely to become high-growth firms, but the majority do not seek advice, according to new research.
The British Business Bank (BBB) found that 81 per cent of smaller businesses did not seek advice when applying for external finance last year and only 14 per cent researched finance options online.
The state-backed development bank conducted the survey following official government figures which showed that small- and medium-sized enterprises (SMEs) that access external advice or information on business matters are between 15 per cent and 25 per cent more likely to become high-growth firms.
The BBB also found that SMEs’ awareness of alternative finance is growing but remains low, with 33 per cent of small businesses still seeking funding from high street banks.
The study comes at the start of small business advice week, during which the BBB is encouraging the UK’s 5.7 million small businesses to seek advice and independent information on finding the finance best suited to their needs.
The BBB has developed its ‘Finance Hub’ to facilitate this – an interactive website providing independent and impartial information on the finance options available for growing businesses.
Small businesses should look beyond the high street when seeking funding, according to Piers Linney, former star of the BBC TV show Dragons’ Den and non-executive director at BBB.
“Getting support and investment for your business does not have to be as daunting as going into the Dragons’ Den,” Linney said.
“There are many ways to get access to finance and business support – the challenge is knowing where to look and making the time to find out about them.
“Getting reliable, independent information on your finance options can make the difference between success and failure.”