Half of West Midlands SMEs have been turned down for bank funding – causing cash flow problems, missed business opportunities and stress.
New research by OnePoll, commissioned by small business funder Liberis, shows that 50% of West Midlands small and medium sized businesses who applied for bank funding have been turned down. As a result, 42% missed an important business opportunity and a third (33%) experienced cash flow problems.
The decision impacted owner/managers personally too with 42% saying it increased their stress and 50% said it made them angry.
However, the region’s businesses are savvier than the rest of the UK about alternative funding sources with 79% of them seeking it, compared to 55% of businesses nationally. Of those businesses that didn’t seek it, 60% said they assumed they would be turned down too and 40% said it was because they didn’t know where to look. 42% of West Midlands businesses wanted funding for business development, 37% for cash flow, and 30% to pay a VAT bill, the highest in the UK.
Commenting on the findings, Liberis CEO Paul Mildenstein said, “The economic crisis has created many new and innovative funding sources for small businesses and it’s great that West Midlands businesses are accessing these. There are still a lot of businesses who aren’t so well informed however and we need to change that, so they can access the working capital they so need.”
Respondents were also interviewed on the personal sacrifices they make for their businesses and the region’s SMEs were above the national average when it came to relationships and family time.
Twenty eight per cent of respondents said they had sacrificed a relationship resulting in break-up or divorce, the highest amongst all UK regions and 16% above the national average. Forfeiting quality time with the family at evenings and weekends was third highest in the UK too, with 45% having done so, 9% above the national average.
Conversely, only 10% of owners/managers had sacrificed personal savings for their businesses, the lowest in the UK and 18% lower than the national average.
Liberis is the latest member to join the Alternative Business Funding collaboration, which is consulting with the government on how to improve access to finance for SMEs following commitments made in the March 2014 Budget.