Thursday, July 9, 2020

SMEs report major improvement in access to finance

Almost half (44 per cent) of small and medium-sized firms applying for development finance over the past year were successful, up from 27 per cent in 2014, according to a report1 by Albion Ventures, one of the largest independent venture capital investors in the UK.

The third Albion Growth Report, designed to shed light on the factors that both create and impede growth among over 1,000 SMEs, reveals that of those who secured finance, nearly a third (29 per cent) of firms did so to invest in new equipment while a quarter (26 per cent) used the money to develop new products and services. However, only one in ten (10 per cent) had sought to raise finance to invest in R&D, a key driver of longer term success.

Bank loans and overdrafts have continued to fall in popularity, down to 49 per cent this year from 76 per cent in 2013. However, the popularity of using third party equity or other long term finance has soared from 6 per cent in 2013 to 34 per cent in 2015 and a third (34 per cent) of firms would consider raising external equity finance.

Despite the improvement, nearly one in five (18 per cent) SMEs said they were affected by a lack of access to finance with the percentage rising to a third (32 per cent) among medium-sized firms with a turnover of between £500k–£1m.

Younger entrepreneurs aged under 35 are the most likely to report difficulties in raising money (28 per cent), almost double the number of business owners over 55 (15 per cent). The findings also show that it is this same demographic that is most likely to embrace an equity culture.

Those sectors most willing to seek equity finance are manufacturing (43 per cent) followed by IT/Telecoms (40 per cent) while the construction industry has the lowest likelihood (19 per cent).

Patrick Reeve, managing partner at Albion Ventures, said: “The UK economy continues to strengthen, providing excellent growth opportunities for UK businesses. Concerns about access to finance have given way to shortages in skilled staff and insufficient management expertise.

“It is a hugely optimistic climate, and we should be encouraged by the revelation that such a high percentage of firms are looking to raise finance to grow and innovate. There is also a clear trend toward non-bank lending such as the popularity of bank loans and overdrafts have continued to fall. What is particularly welcome is the emergence of the ‘Dragon’s Den generation’ – those under 35 who embrace an equity culture.”

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 lockdown having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.






Latest news

Go-ahead given for 300 homes and employment space on Derbyshire brownfield land

Harworth Group plc, a regenerator of land and property for development and investment, has received a resolution to grant planning consent for 300 new...

“Massive mistake” as letter reveals Leicester won’t receive financial support to help localised lockdown

A letter from Business Minister Nadhim Zahawi says there will be no special financial support from the Government for businesses in Leicester and the...

4,000 jobs to go at Boots

Boots has revealed actions to address the impact of COVID-19 on the business, accelerating the Boots Transformation Plan. The plan includes a reorganisation of the...

Frogspark become creative partners with local charity

Derby-based web design and marketing agency Frogspark has signed a deal with YMCA Derbyshire as their creative partner. The nationwide charity supports more than 220,000 children...

The Nottingham enters alliance with Belvoir Group and announces branch closures

The Nottingham has revealed a raft of changes as it enters into a strategic alliance with Belvoir Group PLC. The alliance will see the closure...

Related news

Permission granted for further 60-acre development at Derbyshire business park

Planning permission for a further 60-acre development at Dove Valley Park has been granted by the local authority. Phase one has already welcomed major names...

Go-ahead given for 300 homes and employment space on Derbyshire brownfield land

Harworth Group plc, a regenerator of land and property for development and investment, has received a resolution to grant planning consent for 300 new...

“Massive mistake” as letter reveals Leicester won’t receive financial support to help localised lockdown

A letter from Business Minister Nadhim Zahawi says there will be no special financial support from the Government for businesses in Leicester and the...

4,000 jobs to go at Boots

Boots has revealed actions to address the impact of COVID-19 on the business, accelerating the Boots Transformation Plan. The plan includes a reorganisation of the...

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close