Small firms 'facing challenges when applying for financing'

Many small firms in the UK face challenges when it comes to finding and applying for funding, according to a report published by the Federation of Small Businesses (FSB).

The FSB's report found that 'widespread uncertainty' exists among small businesses in regard to where to get information on the types of finance available to them.

Two thirds of small firms stated that they are planning to make some form of investment in their business by 2024. However, only 49% said that they have information on the different types of financing options available to them.

The FSB has urged the government to 'take action to improve the financing landscape for small businesses'. It recommends introducing a VAT-based capital investment incentive; encouraging the use of the Bank Referral Scheme; and expanding the Start Up Loans Scheme from 11,000 to 15,000 loans per year.

Martin McTague, National Chair of the FSB, commented:

'Small businesses that cannot access finance are small businesses that are cut off from opportunities to grow and expand. It's that simple.

'As a country, we cannot afford to have a repeat of the post-credit crunch scenario, where the dreams of thousands of entrepreneurs and business owners were crushed by a withdrawal of finance options, leaving them unable to continue and deepening the UK's economic woes.

'Many small firms now are in a highly precarious position, carrying debts from the pandemic, with the Bank of England raising the base rate, and with funding options getting scarcer and costlier.'

Internet link: FSB website