Lack of finance still a problem for small businesses

More than 25 per cent of small businesses in the North West have little or no confidence in securing funding for growth, according to a survey published by the Federation of Small Businesses (FSB). That compares with just 3 per cent of larger firms.

The number of companies that were confident that they would be able to identify and access finance for growth was down 7 per cent on the findings from the same study in 2008.

The report, which explored issues facing 834 businesses in the north west region, found that 50 per cent of those that took part said in order to grow, access to finance was crucial. overdrafts and bank loans remain the most popular source of finance for growth with 56 per cent of companies favouring it over other means of funding.

Paul Henly, the FSB's North West policy manager, said the findings show that small businesses lack confidence when it comes to borrowing, believing banks are still not being supportive enough. he added that more needs to be done to communicate the range of support available to small businesses.

"Provided they are given the correct support, SMEs are able to contribute hugely to the UK's economic recovery," said Henly. "It is important for banks to recognise the value of small companies and their potential to contribute to an economically sustainable future."

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