Small firms lack knowledge of financial options

More than half of UK businesses cannot access the funding they require to expand, with a lack of knowledge a driving factor behind this, it is claimed.

According to Liberis, a lack of understanding and education regarding alternative finance options is limiting how firms go about business.

It is suggested that falling confidence levels, as well as mounting business costs and economic uncertainty are placing small firms under pressure.

An estimated £200 billion is contributed to the UK economy annually by small businesses, a figure expected to rise by 20% during the next seven years.

However, a lack of finance is hindering growth and many small business owners have voiced concerns over how best to navigate through the wealth of options that are available.

Education is therefore vial for smaller firms so as to increase awareness of the alterative finance options that are available to firms that are stagnating or in difficulty.

The Government has already backed such plans, which comes at a key time when 62% of UK small businesses say they need funding to grow.

Despite this, 57% are unaware of where to obtain funding from and 53% did not know how much funding they should be applying for.

The research found that insolvency is a serious threat for a number of firms, as 22% of businesses said they needed funding in order to maintain normal operations

Meanwhile, 5% revealed they required finance in order to survive beyond the first year of business, with the speed that it can be available often a decisive factor.

One in ten small firms have turned to crowdfunding sources and state they expect to use these means of finance in the coming two years.

For businesses that are unsure of their next move, an independent business review can help to highlight potential risks and develop stronger strategy.

By taking an unbiased look at a firm’s finances, forecasts and assets, it should be possible to secure a more financially viable future.

By Phil Smith


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