The gap between the amount SMEs would like to borrow and the amount that is actually available from the banks is more than £4 billion, according to a new report.
Figures from Money&Co. show the real-terms gulf between the average size of the last loan approved to UK SMEs and the amount they actually asked for.
Within the £4.3 billion funding gap, firms with 10-49 employees face a shortfall of £11,752 on the amount they would like to borrow, while for firms with 50-249 employees the funding gap is a much bigger £69,961 on average.
Nicola Horlick, chief executive officer of Money&Co., was quoted in the Telegraph as saying: “This research clearly shows that the banks are not providing UK SMEs with the finance they need.
“Although recent figures indicate that theUKeconomy is recovering, we cannot ignore a funding gap of such magnitude.
“The £4.3 billion funding gap isn’t just acting as a barrier to UK SME growth; it could potentially stifle the recovery.”
In other findings from the survey, Money&Co. discovered that 64% of SMEs think the current banking system is broken, and 51% think banking bureaucracy is off-putting when it comes to applying for a loan.
Yet 72% would still approach their bank first if they needed to borrow funds, 11% would look to Government Enterprise Funds, 5% would consider an angel investor, and just 4% would try crowdfunding.