Cost and speed of lending remain barriers to growth
Cheaper, faster, and simpler access to capital required to unlock the potential of ambitious SMEs
The UK Government’s SME plan includes measures to boost access to finance – from expanding the Growth Guarantee Scheme to increasing the capacity of the ENABLE programme – but many businesses still face prohibitive borrowing costs and slow decision-making from lenders.
With interest rates still well above pre-pandemic levels, SMEs are finding that the capital they need to invest in growth remains expensive and slow to secure, particularly for those without extensive trading history. Without reform to the speed, cost, and complexity of SME finance, the UK risks stalling innovation and job creation.
The Government’s “Backing Your Business” strategy aims to strengthen SME access to finance, committing £25.6bn through the British Business Bank and supporting 69,000 Start-Up Loans. We support these commitments but believe their effectiveness should be judged on the real-world experience of SME borrowers.
Peter Gallanagh, UK CEO, said: “Finance is the oxygen of growth, yet for many SMEs it remains rationed. The real test of these initiatives will be whether they make funding cheaper, faster and simpler for ambitious businesses – not just available in theory. Until then, the UK risks seeing great SME ideas stall for want of capital.”
Read our summary of the Government’s Small Business Plan for more information on what may be unveiled as part of this strategy.
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