A new survey by chartered accountants has revealed how SME’s are struggling to get loans due to the strict criteria laid down by the banks.
This might not reveal anything we don’t already know, but with small businesses – including freelancers and contractors – being a key driving force behind the UK economy, surely credit terms could be a little more friendly?
Clearly the banks don’t want to go back to the days of wreckless lending, but cutting off a key source of capital for small companies by making them jump through hoops in order to land it, could constitute wrecklessness of another kind.
The findings were revealed by the Institute of Chartered Accountants in England and Wales (ICAEW) in its latest ‘Business Confidence Monitor’ for SME’s.
Last week, the Government launched a new task force to examine whether the banks are doing enough to ensure that businesses can get the finance they need to grow.
Perhaps one aspect they should look at are the computer-generated responses which can decide an individuals suitability for a loan. These processes can be inflexible and aren’t always able to make the most informed adjudications as to whether a freelancer or small business should get some much needed cash flow.
In their defence, the banks can point towards a separate piece of research by the NACFB (the trade body for the UK’s business finance brokers) that shows the percentage of SME’s indicating access to capital as a challenge fell from 30% down to 20%.
You can read more about this on the BBC’s website.
