October 26 2014 Latest news:
Ben Woods, Business writer
Thursday, January 23, 2014
Small businesses could bring greater economic growth to East Anglia if they knew their strong chances of getting finance, a new report has claimed.
But it comes just days after ministers were warned that despite numerous government schemes small and medium sized enterprises (SMEs) are still struggling to get the funding they need to grow.
Of the 13pc of East Anglia businesses intending to borrow to finance expansion, only 9pc managed to do so – a difference of about 18,000 businesses, according to a study by market research consultants BDRC Continental.
But the findings also suggest that while 37pc of all SMEs planning to apply for finance believe they will get approval from their bank, the approval rates are actually 67pc, with the region accounting for 14pc of all successful business finance applications.
The results have encouraged the mouth-piece of the banking sector – the BBA– to launch a campaign, targeting SMEs with a turnover of less than £25m, to let them know that they have a good chance of accessing finance.
Anthony Browne, BBA chief executive, said: “We want to let businesses in East Anglia know that they are a lot more likely to get finance than they think.
“This matters because more successful loan applications mean more orders for equipment, more new jobs and more plans to expand.
“Small businesses are the engine room of the economy and the research we publish shows how much stronger our recovery could be if more SMEs approached their banks for finance.”
According to the research, if each of the 18,000 businesses applied for finance this would mean: 3,500 small and medium sized businesses could expand in the UK; 3,100 new orders for equipment could be made; 7,400 businesses could boost their spending power; and 1,100 companies could develop new products or significantly improve their offering to customers.
The positive message comes in the face if fears from the small business sector this week when a report by a committee of MPs said the Treasury and the Business Department had not done enough to raise awareness among SMEs of the financing options that are available to them.
The departments cannot demonstrate the success of schemes, even though almost £3bn of financial support will be handed out over the course of 2011/12 to 2014/15, according to the Public Accounts Committee.
The BDRC Continental study was based on 15,000 interviews with small and medium sized businesses.