NACFB Survey 2009/10: The real impact on lending to SMEs revealed

NACFB Survey 2009/10: The real impact on lending to SMEs revealed



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Results from the NACFB’s latest annual survey show short term lending and development finance have made a “revival” this year, with commercial property lending up by 19 per cent year on year.

However, the figures – compiled from a survey of the association’s members – confirm fears that funding for SMEs is still very difficult to come across, “despite many lenders’ protestations that they are lending more than ever.”

Commenting on the results, Adam Tyler, NACFB chief executive, said: “We have continued to see the SME community struggling to raise funding and being faced with increased costs.

“Our latest figures reveal the true position of both excellent and vulnerable businesses across the whole of the UK. These figures reveal what anecdotal evidence has already shown: that funding for businesses is still very hard to access.”

Overall, the survey shows total commercial lending to SMEs via brokers to be up by 17 per cent year on year, but with overall lending still remaining at 39 per cent of the total at the peak of the market.

“Whilst we are very pleased to report that there is an increase in lending over the last twelve months, this has come from a very small base compared to previous years,” said Mr Tyler.

The results weren’t very promising for asset finance brokers, who were shown to be the most affected by the downturn, with many admitting to having to rely on only one source of funding for the entire year.

For those in the vehicle finance business the survey results were better; an increase of around 29 per cent in the business was shown, though this is partly attributed to more brokers moving into the field.

Invoice finance showed a reprieve also, commenting on the findings Mr Tyler said: “The increase in invoice finance for the third consecutive year shows that our members are seeking more cost effective borrowing where they can, as overdrafts limits are reduced but costs have increased.”

In a statement released by the association, Mr Tyler urged small businesses to look beyond the four main high street banks that 90 per cent of SMEs bank with.

“When it comes to borrowing SMEs should not be restricted to these lenders,” he said.

“NACFB members have access to over 50 different providers for their clients. Businesses do want to borrow; they do want to grow. A recent survey of SMEs showed that only 16% had applied to their banks for borrowing, of which one third were rejected.

“These businesses need to feel confident when they are considering borrowing, as many are falling at the first hurdle and not even making it in to the current statistics. Recent feedback from across the membership has indicated that whilst we saw a criteria ease in the early part of the year, this has tightened up once again.”

 

 

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