Report urges airing of hard truths as SMEs face problems accessing finance
A new report published by finance group Praetura has highlighted the need for greater education amongst businesses about the £22.1bn asset finance market.
Launched in Manchester last night (4 October 2023) the Fund the Gap: Financing Futures for UK SMEs report is designed to strengthen ties with brokers and advisers to work with SMEs so they can get access to “the funding they need to succeed”.
Peadar O’Reilly, founder and chief executive of Praetura’s lending division said: “We’ve surveyed and interviewed over 400 business owners, directors, finance brokers and advisers to discover their thoughts and opinions on the state of the SME funding landscape.
“The void created by the reduced prominence of the high street bank manager relationship has been filled by the broker market. Whilst this incurs a cost to the recipient of finance, it provides a vital service as the gateway to the finance market when funding is not readily available from institutional funders.”
The research behind the report revealed that three in five (59%) SMEs and their brokers surveyed say that it is more difficult now to access the funding they need to grow than in the last five years, as a funding crunch hits Britain’s small businesses.
UK SMEs suggest that servicing demand is their biggest challenge, not creating it. Accessing funding is the one of the biggest challenges firms face, according to 43% of the small businesses surveyed by Praetura. This follows rising costs (68%) as businesses’ biggest challenge. Compared to only 24% who suggested business development was holding them back.
The research features in Praetura’s report – Fund the Gap: Financing Futures for UK SMEs – which analyses the state of the funding landscape for UK SMEs. The report features contributions from major business leaders, finance experts and the SME community including British Business Bank, NACFB, EY and others.
The report was launched at an exclusive event yesterday, which featured speakers Harold Brako from Addleshaw Goddard, Peadar O’Reilly from Praetura, Sue Chapman from MAF, Tom Brown from PMD, Gary Cain of Leonard Curtis and Michael Taylor, editor of The BusinessDesk.com.
In the foreword to the reports, Dame Teresa Graham DBE, SME finance champion and chair of the SME advisory group at UK Finance, said: “There are some hard truths that we all must face when it comes to UK SMEs accessing finance – the vast majority of SMEs are struggling to grow at a meaningful rate.
“The common problems limiting SMEs’ potential are access to markets, talent, infrastructure and other known issues, but we rarely talk about patient capital and leadership. Patient capital is finance on their terms, from a provider who takes time to understand their needs and puts their goals first. And while leadership is slightly more nuanced, delivering an education that actually reaches our SME leaders is essential for solving avoidable business failure.”
