71% of applications approved, SME Finance Monitor shows

IN: Business news

The latest SME Finance Monitor has revealed the majority of applications for financing to small and medium-sized enterprises (SMEs) are approved.

As the report from BDRC Continental showed, 71 per cent of all applications for new and renewed facilities have been approved since the monitor started.

That marks positive news for small firms looking to secure finance in an effort to both establish and expand their businesses.

However, it seems awareness of the government-backed initiative, the Funding for Lending Scheme (FLS), remains subdued.

The report suggested 23 per cent of SMEs were aware of the scheme, with that figure rising to 45 per cent among firms with between 50 and 249 employees. 

Still, 20 per cent of companies agreed initiatives like the FLS would encourage them to apply for funding, which was the equivalent of about 900,000 firms.

Launched in August 2012, the fund was set up to ensure small businesses enjoy easier access to bank finance.

Aldermore alone has lent £1 billion to SMEs since 2009, and with schemes like the FLS being offered by the Bank, there is plenty of opportunity for firms to gain access to the money they need.

Matthew Fell, director for competitive markets at the Confederation of British Industry, welcomed the results of the SME Finance Monitor.

He said: “It's good news for growth that more lending applications from small and medium-sized firms are being approved by banks. There are also encouraging signs that businesses are feeling more confident about applying for finance.”

Mr Fell also said that while more SMEs knew about the FLS, there was still a lot of work the government could do to increase its profile among small firms.

It seems a number of small firms will be looking for access to finance over the course of 2013 too, with the report describing 21 per cent of SMEs as ‘future would-be-seekers’ of finance.

So, with demand for lending unlikely to abate in the coming months, now may be the right time for SMEs to consider their borrowing options.  

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