Firms can’t bank on funding, report says

A third of ‘micro businesses’ turned down

• A third (32%) of “micro businesses” surveyed said they have been turned down for bank funding.

SMALL businesses continue to have difficulty securing bank funding, according to research commissioned by alternative financing firm Liberis.

Conducted last month, the survey revealed that 32% of ‘micro businesses’ (those with up to nine employees) claimed to have been turned down for bank funding. Of those businesses, 62% reported having had cash flow difficulties or missing a business opportunity.
The survey found that 49% of micro businesses sought funding for cash flow reasons while 46% applied for business development. Two thirds of those micro businesses seeking funding were said to have required less than £10,000.
The research, which was carried out by data firm OnePoll on behalf of Liberis, also found that 62% of micro businesses were less likely to seek alternative funding sources than their larger SME (small and medium enterprise) counterparts.
The release of Liberis’ survey results followed the formation of an online ‘portal’ site designed to pair SME’s and micro businesses with a suitable alternative finance provider.
Launched earlier this year, is a collaboration between nine alternative financing firms offering different funding approaches. The site works by asking business owners a series of questions to determine a suitable alternative funding solution.
Financing options available include peer-to-peer funding, an online process that matches investors with borrowers; pension funding, which uses company directors’ personal existing pensions to raise capital for their business; invoice trading, which raises capital by selling individual unpaid invoices online to investors; equity crowdfunding, which allows investors to fund projects in exchange for shares in the business; and business cash advance, which is a form of funding based on future credit and debit card sales.
Liberis CEO Paul Mildenstein said it is “great to be part of this unique resource for SMEs that are unable to get bank funding, or are looking for a genuine partnership approach to funding their business”.
“We bring to the portal another valuable and unique funding source, especially for micro and smaller businesses that need flexible finance that fits their business,” he said.
“The portal has fast become an indispensable source for all SMEs; so finding an appropriate source of money has never been so straightforward and with such high success rates.”