John Davies, Director of Just Cash Flow PLC, said research produced by the specialist lender found over 30% of SMEs that had financial applications turned down by their bank simply gave up.
“By far the biggest reason (70%) is that they simply aren't aware of any alternatives,” said John.
“Alternative lenders are waiting to help these businesses but the problem is too many SMEs simply don't know they exist.
“A range of alternative lenders, including Just Cash Flow PLC, are trying to fill this gap but awareness is still a huge issue.”
Another lender looking to raise awareness about alternative finance for SMEs is Regentsmead, which was recently invited to speak about new measures to alleviate the situation at the Department for Business, Innovation and Skills.
“Two of the key areas of focus for this discussion was improving awareness of alternative funding for SMEs and streamlining the planning process to make this quicker and less arduous,” said Ashley Ilsen, Head of Lending at Regentsmead.
“One of the main focusses was trying to get traditional high street lenders to refer on any cases where they are unable to fund, allowing alternative providers to get a second bite of the cherry and further assist SMEs that may be in need of funding.”
Keith Aldridge, Managing Director of Amicus, believes that the hurdles SMEs currently face will continue and this will only be resolved if there are improved routes to funding.
“That is why more and more lenders like Amicus are looking to diversify their proposition and embrace those different markets that SMEs are look towards to help them in facing their challenges,” said Keith.
“Amicus has ambitious plans to help the SME sector - a sector that has not been well served by the main stream banks - and that is why last year we launched Amicus Commercial, to provide cash flow finance solutions and took a stake in Norton Folgate, who serve the asset leasing and vehicle finance requirements of the sector.
“SMEs will find that 2016 offers them more transparent options to deal with their funding needs as prudent lenders turn their attentions to the opportunities the sector offers and work even closer with (NACFB Chief Executive) Adam Tyler and the NACFB to support like-minded SMEs.”
John, however, sees a golden opportunity while these funding problems remain.
“Our own research revealed the high percentage of businesses that give up looking for finance,” said John.
“Another telling finding was 93% of businesses couldn't name one local commercial broker.
“What an opportunity for commercial brokers to help in 2016 - by investing in marketing themselves to local businesses and educating them about the alternatives that are available.”
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