Small to medium sized businesses cite a lack of time and fear of being penalised as reasons for never switching finance provider
A third of small and medium-sized UK businesses have never changed their finance provider, according to new research carried out by the Close Brothers Business Barometer.
The news comes at a time when other research has shown one in five small businesses were rejected for a credit bank loan or overdraft last year, forcing them to consider alternative forms of finance. Companies cite a lack of time to review a financial strategy, being unsure of options and a fear of being penalised by a current provider as reasons for not changing financial providers.
Of those that did switch in the last 10 years, almost one third have moved from a high street bank to an alternative source of finance. Additionally, two fifths of that number believe alternative lenders are cheaper than traditional forms of finance, while 37% changed because it offered more flexibility.
The Close Brothers Business Barometer carries out a quarterly survey canvassing the opinion of small to medium sized business owners and senior management.
CEO of Close Brothers Invoice Finance, David Thomson, said:
“It’s worrying that so many small businesses don’t appear to be regularly appraising their business finance, which is arguably a little complacent.
“Without taking the time to properly assess their situation and understand the full range of financial options available to them, small business owners and managers could miss out on opportunities for growth as the funding they have in place may not be fit for purpose.”
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