Nearly half of SMEs claim banking advice failed them in 2016

Almost half of the UK’s small business owners have claimed the advice they received from major banks in the last year had a detrimental effect on their business.

Some 47% of those questioned by Amicus Commercial Finance said advice had a negative impact on operations while 16% said their firm was in a worse position as a result.

More than half of small business owners (52%) said they ignored advice from their mainstream bank during the last 12 months too as they were unsure of whether it was applicable to their company.

Four in ten owners suggested that the advice they receive is not ‘good’ while those in the West Midlands and North West (both 53%) are most dissatisfied with the services they receive.

Exactly half of firms that operate in the communications and IT industries are not impressed with their bank’s advice either.

A third of businesses that had requested overdraft facilities or working capital said they wouldn’t describe their bank as ‘helpful’ and 46% said the word ‘flexible’ could not be used to describe them either.

Meanwhile two thirds of SME owners in the West Midlands said they felt their bank was not helpful, while 57% of those in both Eastern England and the South West said the same.

Flexibility was the biggest issue for business owners in Yorkshire and the West Midlands, where 53% and 57% of firms respectively felt their bank had not provided appropriate support.

For businesses hunting for overdraft facilities and working capital, a lack of human interaction was a key concern – businesses listed dealing with call centres as time consuming, frustrating and complicated.

Failing to access the appropriate services, or acting on bad advice, could severely impact on business finances, potentially leading to debts, poor sales and even administration.

Other firms meanwhile are turning to alternative finance options to ensure they can keep trading, as they search for new methods of raising finance.

Amicus Managing Director John Wilde suggests that most traditional mainstream systems have failed to keep pace with the concepts of working capital and cash flow in recent years, which has led to the issues surrounding flexibility and the standard of advice being provided.

By Phil Smith

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