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In Q4 2012, we conducted a survey of 3,600 SMEs that found the banks’ reluctance to
lend has forced 8 out of 10 businesses into cashflow difficulties
Here are the facts:
Nearly 2 out of 5 are relying on bank overdrafts to cover cash shortfalls, and a worrying 14%
are spending their own savings to pay the bills.
The poll’s findings also deliver a damning verdict on bank claims that they are still
open for business – with two thirds of respondents saying they feel banks are less willing to
lend now than a year ago.
More than 84% of firms rate the banks’ reluctance to offer credit as a barrier to success, with
nearly as many (83%) saying they have had to slash margins to compete.
The threats posed by cashflow problems are highlighted by the nearly 72% of businesses
who say they are falling behind with their bill payments.
But bank credit clearly remains elusive, with 70% of those who approached their bank about
a business loan or an overdraft not applying because the process was too lengthy.
Even among those who were offered bank finance, more than three quarters (78%) turned it down
because they found it too expensive.
Commenting on the results, Platform Black CEO Christopher Shaw said:
"The research shows that on the business front line, there is a huge gulf between rhetoric
and reality. Many SMEs feel that the banks' claims that they are open for business and
willing to lend are sounding more absurd by the day.
"The weak economic climate and increasing prevalence of late payment are stretching
many businesses’ cashflow to breaking point. It’s especially alarming that two in five
of those we polled are relying on bank overdrafts to ride out the peaks and troughs of cashflow.
“Sadly that rug could soon be pulled from under them, as many banks now concentrate
more on repairing their balance sheets than lending. Even vibrant businesses are routinely
having their overdrafts withdrawn. “This is why we're seeing legions of small
businesses explore alternative sources of finance, like invoice trading.
"The alternative finance market has truly come of age, and the future of SME lending
is set to be much more diverse. The banks will still play a major role, but many businesses
have discovered that there are cheaper and more flexible alternatives.”
So, Invoice Trading is about taking control of your cashflow
You call the shots: you use the service only when you want to
And you pay only when you use the service: it’s completely transparent, there are no
hidden charges the cost of finance is competitive: you set
the max price, our buyers bid down to give you the best price
It’s confidential: we don’t tell your customers
And it’s flexible: there are no charges over your business, no personal guarantees,
no lock ins, and no notice periods
So, if you… Sell to businesses
Have invoices in the thousands of pounds And sometimes need more working capital
You can… Become a member of Platform Black
Run auctions – calling all the shots And access PAYG cashflow on demand
You can email Rob for more information, his email address is Robert.holland@platformblack.com,
or you can call him on 08434 610100.