The latest small business survey carried out by the Department of Business, Innovation and Skills (BIS) shows that 26% of SME employers sought finance in 2010, up from 23% recorded in 2006/07.Demand was higher among firms in primary industries, with 45% seeking finance, compared to business services (22%). According to the report small businesses in construction, transport, retail and distribution were significantly more likely to have sought finance compared to the previous survey.
The BIS research shows 32% of newer businesses sought to access finance, compared to 22% of those trading for ten years or more. By size, medium-sized businesses (4%) were much more likely to seek finance than small (33%) or micro businesses (25%).
In all, 51% of SMEs seeking finance experienced difficulties obtaining funding from the first source they approached – more than twice the number in the same survey carried out in 07/08. More than a third (35%) were unable to obtain any finance at all.
Sectors in which difficulties in accessing finance were most commonly encountered were construction (60%) and transport, retail and distribution (56%). Firms seeking overdrafts were more likely to encounter difficulties than those who sought bank loans (56% compared to 48%).