Conventional bank loans, often seen as the traditional option for raising business finance, are being ignored by small and medium-sized businesses due to worries about restrictive eligibility criteria and the wide range of other finance options available, says Bibby Financial Services.
Although statistics from the CBI show that bank lending to businesses increased in November 2009 for the first time since January 2009, lack of access to finance over the course of last year saw many businesses turn to other options.
Research Bibby Financial Services carried out into the financial intermediaries sector in 2009 found that the question of raising finance is a key concern for four in 10 small and medium-sized businesses but 74% had found that stricter bank lending criteria had made it harder for them to get funding.
Bibby says the small business community have become increasingly aware of factoring and invoice discounting as a method of raising finance. The Asset Based Finance Association (ABFA) recently published statistics showing total funding advanced to businesses in the UK in Q3 of 2009 rose to £48,667 million, an increase of 4% on Q2 2009 figures.
Bibby Financial Services’ UK chief executive Edward Rimmer said: “The lack of available finance through 2009 caused issues for many businesses