Banks still holding back on SME loans

Figures from the Bank of England revealed this week show that banks are not currently lending enough to business according to research from personal asset lender Borro.  The research figures show that about two out of every five or 40% of all SME’s have seen their revenue decrease over last year as well as their clients reduce their spending budgets.

As supplier costs continue to increase and businesses must face customers paying their invoices late SME’s are in more need of financial aid from time to time then they were previously. Cash flow issues made up about half of the reasons that SME’s were forced to look for external finance options over the last year. Other common reasons for seeking out a loan were to maximise business opportunities, pay staff wages, and to pay mounting tax bill.

Borro saw a large increase in the amount of SME owners that turned to them for cash loans that were lodged against their own personal assets.  On average, the typical SME loan is about £17,000 with a short term loan period of about five months.  These loan seekers often levied their loans against classic cars, antiques fine art, and prestige.

CEO of Borro, Paul Aitken, stated that the company is willing to offer free finance for business owners that are able to levy their loans against their own personal assets within a 24 hour time frame.

He continued to say that about 70% of their lending customers are SME owners that need to get finance quickly so that they can jump on an opportunity for expansion that will help them eventually contribute to economic growth.  He added that over the last year the company has seen a large amount of SME owners request loans and they expect to see the number continue to increase.