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More than 3 million of UK SMEs are unable to grow without funding

The majority of small and medium-sized enterprises (SMEs) in the UK require funding to overcome cashflow issues and pursue their growth plans, new research from Channel Capital (Channel) has found.

The UK-based, FCA-regulated asset manager commissioned a survey of 506 senior leaders within UK SMEs. It found that 59% of businesses currently need funding to ease day-to-day cashflow issues – that equates to 3.29 million SMEs, while more than two-thirds (68% or 3.80 million) need funding to grow.

There are 5.6 million SMEs in the UK, accounting for 99.9% of the business population as well as three fifths of the employment and around half of turnover in the UK private sector.

Despite the demand for an injection of capital, Channel’s research showed that SMEs are struggling to find suitable lenders. Just 51% said it is ‘easy’ or ‘very easy’ to find an SME loan.

Just over half (54%) of UK SMEs think big banks are too slow in assessing business loan applications, with 47% saying high street banks are reticent to lend to smaller businesses.

Almost two in three (65%) respondents said they are open to using alternate lenders for SME finance options, compared to 31% who said they would only trust a high street bank for a business loan.

Elsewhere, Channel’s study revealed that, of those SMEs which have applied for a business loan in the past, a fifth (20%) thought the process was ‘difficult’ or ‘very difficult’.

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Walter Gontarek, CEO of Channel, said, “From Brexit to the pandemic; the cost-of-living crisis to government fiscal U-turns, the past five years have been hugely challenging for SMEs – and financial planning is extremely difficult in the face of so much political and economic uncertainty, as our research has shown.

“Millions of SMEs need funding to soothe cashflow headaches or, crucially, to pursue growth strategies. Yet unfortunately, accessing that finance is notoriously difficult. Our study highlights the poor experience SMEs often have with big banks’ reluctance to lend, not to mention complex and time-consuming application processes with no guarantee of approval.”

Ion Fratiloiu, CCO of Channel, added, “Accounting for three-fifths of employment and half the turnover in the UK private sector, we must better support SMEs with easier access to finance.

“The SME loan market needs to undergo the same level of disruption as consumer loans have, with technology-led and online lenders coming to the fore so borrowers can enjoy the benefits of greater choice, speed, and transparency.

“Positively, our research shows SME leaders are open to working with alternate lenders, including digital lenders, so we’re confident that improving access to finance will open up many new opportunities to these businesses.”

Source: London Loves Business

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Nine steps to starting a business

There are a lot of things to consider when starting a business. But don’t worry; this article is here to help. Follow these simple steps, and you’ll be on your way to success in no time.

  1. Figure out what you want to do
    This may seem like the most obvious step, but it’s important to take some time to really think about what you want your business to be.

What are your passions and skills? What needs are not being met in the marketplace? Once you have a good idea of what you want to do, you can move on to the next step.

  1. Do your research
    Before you start putting any money into your new venture, it’s important to do your research. This includes things like studying the competition, identifying your target market, and putting together a business plan.
  2. Get the money you need
    Starting a business takes money. You’ll need to have enough to cover your startup costs, as well as enough to keep the lights on and pay yourself (and any employees) until the business is generating income.

There are a few different ways to get funding, including taking out loans, selling equity in your company, business credit line, or using personal savings.

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  1. Find the right location
    The location of your business is important for a number of reasons.

You want to be sure you’re in an area that makes sense for your type of business, and you also want to make sure you’re in a place where people can easily find you.

  1. Get the right team in place
    No business can be successful without the right team in place. In addition to yourself, you’ll need to have employees or contractors who are experts in their respective fields.

It’s also important to have a good support system in place, including family and friends who believe in your vision.

  1. Promote, promote, promote!
    Once your business is up and running, getting the word out there is important. There are a number of ways to promote your business, including advertising, social media, and public relations.
  2. Be patient
    Starting a business is a lot of work and doesn’t happen overnight. So it’s important to be patient and to keep your eye on the long-term goal. Remember, Rome wasn’t built in a day!
  3. Be prepared for bumps in the road
    No business is immune to challenges, and there will inevitably be times when things don’t go as planned. It’s important to be prepared for these setbacks and to have a way you’ll overcome them.
  4. Celebrate your successes!
    Last but not least, don’t forget to celebrate your successes. Every milestone, no matter how small, is worth celebrating. This will help keep you motivated and focused on your goals.

In conclusion
By following these simple steps, you’ll be well on your way to starting a successful business.

Just remember to take your time, do your research, and surround yourself with a great team. And before you know it, you’ll be on your way to achieving your dreams.

Source: Retail Tech Innovation Hub