A continued fall in bank lending to SMEs could be crippling Lancashire businesses unnecessarily because companies are not making enough use of other funding streams.
That’s the stark warning from Enterprise Europe Network North West (EENW), the public sector body that offers help to SMEs in identifying suitable funding options and expanding overseas.
The warning follows the latest Access to Funding survey by the European Commission and European Central Bank, which found that 15 per cent of small businesses see access to finance as one of their most challenging business concerns.
Andrew North, innovation adviser at EENW, said: “While the latest monthly figures from the Bank of England show lending to big firms increasing by £1.1bn for big firms, the story is very different for smaller businesses.
“SME’s experienced a fall in lending from banks of £383m.
“On the face of it, this presents a very bleak picture for SMEs but if we return to the Access to Finance study, 32 per cent of UK respondents reported that they had received finance from non-bank sources including government, microfinance institutions and private investors. More companies in Lancashire need to do the same.”
The EENW has highlighted ‘Growth Vouchers’, a pilot scheme launched by the Department for Business Innovation & Skills (BIS), which begins in January 2014 for a year-long trial.
“Under the scheme micro and small businesses will receive vouchers for £2,000 which they must be willing to match fund.
There is also Horizon 2020 due to come into force in 2014, providing €70bn for SMEs across the EU.