SMEs are setting their sights on finance
Appetite for finance among small businesses in the UK remained high in the first quarter of this year, with many firms targeting expansion.
Despite this, the latest data from BDRC revealed a gap between perceptions and reality surrounding gaining approval for lending.
The SME Finance Monitor found that around 80% of companies have successfully applied for finance in the past 18 months.
This has left confidence at its highest level since 2011 when the survey began yet bosses are still much more likely to get funding than they think.
While the reasons for why businesses believe they will be unsuccessful are unclear, the data suggests that many firms may be missing out on opportunities as a result.
In situations where finances are tight, additional funding could help businesses to increase marketing, introduce new products, or even alter locations into larger office spaces.
This means that growth could be stalling as company owners are unaware of the financial options that are available to them.
In the first quarter, 55% of those surveyed said they felt an application renewal would be successful, despite this proving to be true in 98% of cases.
It was a similar situation for new applications too, with only 40% thinking they would be successful compared to 65% of businesses that actually are.
Overall, more than 75% of applications were successful in the past 18 months, with quarter-on-quarter improvement noted throughout the period.
Interestingly, just 6% of companies suggested they see finance as a barrier to growth, compared to 13% who has fears over the economic climate and 12% who believe new regulations could slow success.
Other issues such as political uncertainty and cash flow problems were also named, although in the case of the latter, it is best to seek professional assistance from insolvency practitioners before any problems become too pronounced.
By Phil Smith