British Bankers Association calls for higher confidence in bank lending from SMEs in the retail sector

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BBA: campaign to raise confidence in retail SMEs of gaining finance

BBA: campaign to raise confidence in retail SMEs of gaining finance

The British Bankers Association (BBA) is calling for higher confidence in bank lending from SMEs in the retail sector and launching a campaign to let businesses know they are a lot more likely to get bank finance than they think.

The BBA’s analysis of independent research from BDRC Continental of 15,000 SMEs, found that while only 37% of all SMEs planning to apply for finance believe they will get approval from their bank, actual approval rates are a lot higher at almost 67%.

The research has identified that while 17% of businesses in the retail and wholesale sector intended to borrow to finance expansion only 10% actually ended up doing so – a difference of around 26,000 businesses. The research from the BDRC survey identifies a lack of confidence in their chances of success as one of the key reasons for this, said the BBA.
 
Increasing confidence around lending amongst retail and wholesale sector businesses has the potential to boost the UK economy. Based on the figures for the UK overall, if all of those 26,000 businesses went ahead and applied for finance this could enable:
 
  • 7,600 small and medium sized businesses expand in the UK
  • 6,800 new orders for equipment
  • 16,300 businesses to boost their spending power
  • 2,400 companies to develop new products or significantly improve their offering to customers
Launching the new campaign BBA chief executive, Anthony Browne, said: “We want to let businesses in the retail sector 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 today shows how much stronger our recovery could be if more SMEs approached their banks for finance.”
 
The campaign will include online advertising specifically targeted at businesses with a turnover of less than £25m in the retail and wholesale sector. The new Better Business Finance (BBF) website, www.betterbusinessfinance.co.uk, is said to be a one-stop-shop resource with impartial information relevant to retail businesses. 
 
The new campaign will work alongside the government, politicians, banks and business groups to spread the message that SMEs are a lot more likely to get finance than they think.
 
The campaign will also feature social media outreach, top tips for finance success, promote schemes such as business mentoring and showcase examples of businesses that have gone on to grow and prosper after securing a loan, the BBA said.