The majority of SME’s do not trust traditional lenders to support their businesses.
Investing from their own Resources
More than a third of businesses (35%) surveyed by Hitachi Capital Invoice Finance try to avoid borrowing money at all costs and would rather invest from their personal savings than borrow from another source.
The main reason for not wanting to borrow money, is that companies want to owe as little as possible (53 per cent), with a further one in ten admitting that borrowing money has led the business into further debt in the past.
Little Trust of Traditional Lenders
Of 502 business owners surveyed, just 15 per cent say they completely trust traditional lenders, and the main reasons for not trusting them is because of a bank’s reputation (37 per cent), followed by previous and personal experiences (30 per cent, 26 per cent) and for security reasons (26 per cent). The media does not appear to affect business owner’s attitudes towards traditional lenders (nine per cent).
Andy Dodd, managing director at Hitachi Capital Invoice Finance comments, ‘It’s interesting to see business owners remaining cautious with regards to business funding, potentially restricting their ability to grow
‘More than twenty percent also noted that maintaining their cashflow is a top concern for them for the year ahead, and indicates this is something they are currently struggling to manage. It is important for business owners of any kind to be aware of the funding options available to them and what they are eligible for, as there are a number of options available to help prioritise overdue payments and maintain financial resource, particularly outside traditional lenders.’
So before committing your funds to your business, take a look around at the different options available to you such as Invoice Finance or other forms of alternative finance.