Confidence levels amongst Owner managed businesses and their ability to access finance has reached its highest level since the launch of the Bank of Cyprus UK Owner Managed Business (OMB) Barometer in early 2013. Two fifths (41%) of businesses are confident that their bank would agree to a request for new lending.
This is up significantly from the last iteration of the research where only a quarter (24%) were confident their bank would agree to such a request.
The renewed focus by the Government and banks on ensuring loan facilities are made available to small businesses may be the reason behind the optimism. Yet businesses are not necessarily taking the plunge with only one in 10 (12%) planning to ask for new or increased facilities from their bank over the next three months. This reveals a discrepancy between the reported availability of borrowing and demand from businesses themselves. Interestingly, this figure remains unchanged from last quarter.
Respondents were also questioned on the type of financing they have used to support their businesses in the last six months. More than two fifths (43%) of businesses financed their business through existing cash flow. Nearly a quarter (24%) said that they use personal savings, with a further tenth (12%) using personal credit cards. Businesses were least likely to use asset finance (4%) and available Government schemes (4%).
Positively, when businesses have used external financing two thirds (68%) of them commented that it was easy to access this.
Tony Leahy at Bank of Cyprus UK commented: “It is positive that after so much bad press around banks, small businesses are becoming increasingly confident that they can get access to additional funding if required.
“It is particularly encouraging that a large percentage of those who required external financing have found the process relatively straight forward. However whilst access to lending is improving, it is clear that many businesses are still cautious and not quite ready to take on the cost and risk of additional borrowing.”
For further information please contact:
Rachel Finlay, Teamspirit Public Relations, 0207 360 7877, firstname.lastname@example.org
Kate Mallett, Teamspirit Public Relations, 0207 360 7877, email@example.com