SMEs in danger of funding drought, trade body says
Aug 29 2008
Small and medium-sized businesses may face a funding drought as banks begin to make accessing finance more difficult, the Forum of Private Businesses (FPB) claims.
A study by Cambridge University's Centre for Business Research finds that months before the full impact of the credit crunch hit, small firms struggled to access finance.
'The research shows that, although the funding requirements of small businesses rose steadily during 2007, the likelihood of banks awarding funds fell just as steadily,' remarks FPB director of finance and administration Nick Palin.
He adds that the impact of the credit crunch has now made accessing finance for small businesses 'much more difficult'.
SMEs are not cutting expenses where they could, meaning they are applying for loans they do not necessarily need, Palin continues.
Earlier this month, the Times reported that the best way to finance a start-up is to build a trading record before going to potential investors.
A study by Cambridge University's Centre for Business Research finds that months before the full impact of the credit crunch hit, small firms struggled to access finance.
'The research shows that, although the funding requirements of small businesses rose steadily during 2007, the likelihood of banks awarding funds fell just as steadily,' remarks FPB director of finance and administration Nick Palin.
He adds that the impact of the credit crunch has now made accessing finance for small businesses 'much more difficult'.
SMEs are not cutting expenses where they could, meaning they are applying for loans they do not necessarily need, Palin continues.
Earlier this month, the Times reported that the best way to finance a start-up is to build a trading record before going to potential investors.