A fifth of UK SMEs miss out on opportunities because they lack the funds

A new study from Aldermore has revealed that a lack of finance costs medium-sized firms an average of £112,508 in lost chances each year

A fifth of UK SMEs miss out on opportunities because they lack the funds

Whether an entrepreneur is bootstrapping their enterprise, asking banks for loans or raising funds with investors, accessing money is fundamental to boost startups’ chances of success. However, getting their hands on cash can be easier said than done. In fact, a new study has highlighted that 19% of British SMEs have missed out on business opportunities because they couldn’t access finance.

Having surveyed 1,003 SME decision makers among small and medium-sized firms, Aldermore, the specialist SME lender, found that missed opportunities are costing the nation’s companies an average of £77,651 per year. Worst hit were the businesses with between 50 and 249 employees. Of the companies of that size, 32% said that they’ve been significantly impacted by not having access to the funding they need, which is estimated to cost each company an income of £112,508 per year. Of the businesses with between ten to 49 employees, 28% said that they’d missed out on a business opportunity over the past 12 months because they hadn’t had enough capital. And 9% of microbusinesses with fewer than ten employees said the same.

Of the people polled, 18% said their organisations access finance through traditional bank lending, including overdrafts and credit cards. Comparatively, alternative finance, including asset finance, invoice finance and crowdfunding provided money for 14% of SMEs.

Commenting on the report, Carl D’Ammassa, group managing director of business finance at Aldermore, said: “With more than two fifths of SMEs saying that their key business priority for 2017 is achieving business growth, it is frustrating to see that so many firms are missing out on business opportunities due to a lack of appropriate funding.”

Recognising how paramount it is for startups to raise money, the government launched a new alternative funding scheme in November 2016. And while it was certainly a welcome move, the question is if this scheme will be enough to ensure that fewer SMEs miss out on future opportunities.

Eric Johansson
Eric Johansson

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