Speaking to Aldermore last week, Norris highlighted the issues faced by clients of the online accountancy firm.
"As part of our business we're helping freelancers, contractors and small businesses look after their finances so that means dealing with their banks quite a lot," explained Norris, adding, "One thing we noticed is that a lot of our clients aren't particularly happy with their banks and often it's not because of bad customer service or anything like that; it's because they're being refused credit quite a lot."
Norris reports that an increasing number of Crunch Accounting's small business customer base are turning to alternative finance options to fund growth, as a response to banks tightening their lending conditions.
"If you need an immediate cash-flow injection, traditionally that might have come in the form of an overdraft so you'd suddenly have all this extra money to play with. Now lots of SMEs and freelancers are finding that they're not being allowed to have an overdraft anymore," confirmed Norris, continuing; "So they're having to find other ways to get cash into the business and that can come through factoring or invoice discounting and that sort of thing."
While Norris is pleased to see financial institutions providing alternative sources of capital for SMEs, he nonetheless believes more must be done to improve access to traditional forms of credit.
"They're definitely viable alternatives," asserted Norris, "But my main concern is basically why are they necessary? Why has it come to the point where SMEs are having to go out and find these other sources of cash-flow when there are already established ways to deal with these things but they just can't get to them because banks are slamming the door in their face."
On a positive note, Norris does see some progress being made in this area, but judges that it is insufficient to keep pace with the burgeoning number of start-ups and small businesses seeking to invest in expanding their business.
"Things are improving but they're improving very slowly," summarises Norris, concluding, "There's more funding but more people are starting up their own business and becoming self-employed so as a proportion of the whole business landscape there's more people being denied."
As a champion of SME finance, Aldermore are committed to turning this discouraging lending situation around for the many thousands of promising SMEs operating in the UK. Having already extended over £1 billion worth of lending to small British businesses, Aldermore hope to enable an even greater number of SMEs to make their growth aspirations a reality in the near future.
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