Scottish SMEs failing to match funding to growth aspirations

Mon, Sep 08, 2014 13:16 CET

Few firms aiming to secure finance despite investment plans

Despite the buoyant mood of small and medium-sized businesses (SMEs) in Scotland as confidence levels are restored and more than two thirds (69%) of owners predict ‘significant’ growth, a new report from Bibby Financial Services reveals that when it comes to seeking finance for their business, SMEs are failing to shop around.

The SME Sentiment Scotland report shows that nine in ten Scottish SMEs claim they are not looking for external funding in the immediate future - even though more than half (54%) are planning to invest in their business over the coming months. Of those planning to invest, a considerable 72 per cent state they will fund investment using their own money, rather than seeking external finance.

Alan Anderson, Head of Sales at Bibby Financial Services Scotland said: “Our research begs the question of why Scottish SMEs are not proactively seeking alternative forms of finance and shopping around for the best deals – particularly when so many are planning to invest in equipment and recruitment over the coming months.

“The danger is that SMEs could actually be inhibiting their growth prospects and stifling jobs creation in the future by failing to investigate external finance now.”

Of those SMEs who do use external funding to grow their business most are not looking beyond traditional bank lending and overdrafts. The funder’s research shows that some 79 per cent rely mainly on bank loans and overdrafts to finance their expansion plans – despite the fact that different forms of finance including invoice finance could serve them equally well.

A separate report by the Enterprise Research Centre (ERC) to Scottish parliament, argues that alternative forms of financing are not used by SMEs due to lack of availability, awareness, financial expertise and confidence.

Alan Anderson added: “With 58 per cent of Scottish owners and managers relying heavily on their accountants for business advice, it is clear that these professionals have a crucial role to play in helping businesses with key decisions such as how to structure their finances and fund their growth.

“The traditional banking model is no longer able to meet the complex and varied funding requirements of growing SMEs. It’s vital that owners shop around and ensure they have the information they need to make the most suitable funding decision for their business - and that they can take advantage of the benefits of alternative, non-bank finance.”

Bibby Financial Services’ SME Sentiment Scotland report can be downloaded at: http://www.bibbyfinancialservicesblog.com/reports/.

ENDS

For more information, please contact Bibby Press Office on:

Bibby Financial Services
Press Office
bibbypr@brayleino.co.uk

0117 973 1173

NOTES TO EDITORS

To find out more about Bibby Financial Services visit:

www.bibbyfinancialservices.com

Bibby Financial Services’ SME Sentiment Scotland report can be downloaded at:

http://www.bibbyfinancialservicesblog.com/reports/.

About Bibby Financial Services

Bibby Financial Services is the UK’s leading independent invoice finance specialist and a trusted provider of cashflow funding solutions to 7,000 businesses, handling annual client turnover of £4.9 billion and advancing in the region of £388 million.

With a network of 17 local offices throughout the UK, Bibby Financial Services has the agility to make informed funding decisions quickly and efficiently.

Bibby Financial Services is a member of the Asset Based Finance Association and supports businesses in both the UK and overseas, utilising expert knowledge from more than 28 years’ experience, helping companies regardless of size across a broad range of industry sectors.

In 2011, 2012 and 2014 the company was awarded a place in The Sunday Times 100 Best Companies to Work For and in 2013 it was awarded the NACFB Best Factor and Invoice Discounter award for the sixth consecutive year and ninth in total.

About Bibby Line Group

Bibby Financial Services is supported by its parent the Bibby Line Group, a business-to-business services group involved in ship owning and operation, shallow water accommodation, offshore oil and gas services, contract logistics, financial services, memorial parks, employment law and health and safety advisory services, specialist plant and equipment hire, and retail.

The company was founded by Liverpool entrepreneur John Bibby in 1807 and has its head office in Duke Street, Liverpool.

About Bibby Leasing

Bibby Leasing is a member of the Finance and Leasing Association (FLA) and part of Bibby Financial Services, the UK’s leading independent invoice finance provider.

Bibby Leasing currently supports businesses throughout the UK in the purchasing and refinancing of essential, expensive industry equipment.

For more information, please contact Bibby Financial Service Press Office on:

Bibby Financial Service
Press Office
bibbypr@brayleino.co.uk
0117 973 1173