Increasing Number Of Businesses Being Refused Loans
We have reported recently on how the government has been providing funding through banks which is designed to help them to be able to offer loans to small businesses, in order to help them survive the current economic down turn and in fact the total number of business loans have increased over the past few months as a consequence of this action.
However, a new survey conducted by Venture Finance has found that the number of small firms which have been declined for a business loan has increased by almost three times over the course of this year.
Venture Finance conducted a survey amongst 1,000 firms of accountants across the UK, asking them about their clients’ ability to be able to obtain a business loan. A similar survey was carried out at this time last year and this found that fewer than 20 per cent of companies had been refused a traditional bank business loan, however the same survey this year has seen the number of business loan rejections increase to 58 per cent.
Regionally, the worst affected area is the North East, with around 73 per cent of firms being refused a business loan. Not surprisingly, the best area for new loans is the South East, with only 48 per cent being rejected. Furthermore, of the accountants surveyed, 71 per cent of these have said that they have seen an increase in the number of bad debt cases amongst their clients.
Peter Ewen of Venture Finance said “It’s not all doom and gloom. Whilst the rise in credit refusal by traditional lenders may suggest the business world has come to a complete halt, but of course it hasn’t. Business owners are just getting smarter and proactively reviewing their options.”
