Autumn statement: SME funding announcement is not enough - 'disappointingly short' of what is needed
Fleximize, the SME alternative finance company, says the Autumn statement announcement to provide a near £1 billion boost to SME funding – including £500 million of new bank lending - is not enough and it does not properly address the main problem, which is that mainstream banks are not interested in lending to small businesses.
New analysis by Fleximize released today suggests that banks rejected £1.44 billion of loan and overdraft applications from SMEs during Q3 of this year alone. It estimates that this is an increase of £317 million on Q2.
In addition to this, new Fleximize research reveals that 44% of SMEs who have been offered credit by banks over the last year said the amount fell short of what they applied for.
Max Chmyshuk, Founder and Managing Partner at Fleximize, said: “Any additional sum of funding for SMEs is welcome but the amount pledged falls disappointingly short of what is needed; and more importantly, banks face other commercial and regulatory challenges discouraging them from lending more to the SME sector. It’s much easier for them to deploy money to large corporates.
“The government must find ways in which to encourage SME lending by either forcing banks to lend more to SMEs or perhaps allowing alternative lenders into the FLS. Many financially strong businesses are being rejected by banks even though they pose little risk of not repaying their credit. In our first 10 months, we have lent over £3 million and we expect to triple our book size over the next year. A large number of our clients were turned away by the big banks when they applied to them for credit, yet they are excellent clients of ours.”
Fleximize offers a choice of flexible loans and revenue-based financing to small and medium sized businesses.
For further information on Fleximize visit www.fleximize.com or call 020 7100 0110.