SMEs ‘struggling to access finance’

Small and medi­um-sized enter­pris­es (SMEs) are strug­gling to access finance and work­ing cap­i­tal, accord­ing to a report pub­lished by the Asso­ci­a­tion of Char­tered Cer­ti­fied Accoun­tants (ACCA).

The ACCA’s data showed that small firms are strug­gling to access finance for a range of rea­sons, includ­ing ris­ing inter­est rates. 57% of firms report­ed that bor­row­ing in order to man­age cash­flow has proven more dif­fi­cult over the last quar­ter when com­pared to the pre­vi­ous 12 months.

47% stat­ed that sup­pli­er cred­it is now hard­er to access, and 27% said that access­ing sup­port from HMR­C’s Time to Pay ini­tia­tive is hard­er.

Small firms also found late pay­ment to be a ‘per­sis­tent prob­lem’ in the UK, cre­at­ing bar­ri­ers for cash­flow through­out sup­ply chains and lead­ing to adverse con­se­quences for some busi­ness­es.

Late pay­ments by large busi­ness­es have the most detri­men­tal impact on small firms, the research revealed: late pay­ments from large firms gen­er­ate a ‘domi­no effect’ through­out sup­ply chains.

Glenn Collins, Head of Tech­ni­cal and Strate­gic Engage­ment at the ACCA, said:

‘More effort is need­ed in encour­ag­ing banks to reach out to the SME com­mu­ni­ty and to pro­vide more suit­able finan­cial prod­ucts.

‘Equi­ty finance offers an alter­na­tive route to rais­ing funds. And gov­ern­ment needs joined up think­ing to make sure it is not acci­den­tal­ly restrict­ing the flow of finance to this cru­cial sec­tor.’

Inter­net link: ACCA web­site