A lack of access to finance could be putting the handbrake on Nottingham’s economy, a small business survey reveals.
Research shows almost half of the city’s small businesses have not expanded because they have been unable to access the credit they need.
Three in ten Nottingham firms say a lack of access to finance has forced them to delay hiring more staff.
The poll, commissioned by city-based BusinessFinanceCompared.com, also discovered small businesses described accessing finance “difficult” (29% of small businesses), “time-consuming” (30%) or “confusing” (17%).
While very few companies had tried accessing alternative sources of finance.
Olly Betts, CEO of BusinessFinanceCompared.com, said it was high-time Nottingham firms looked beyond tradition sources of credit to access the capital they need.
At the moment, fewer than one in ten of Nottingham’s small businesses have tried to access alternative finance – suggesting that they need more help understanding what options are out there and what could be right for their business.
Olly Betts, CEO of BusinessFinanceCompared.com, said:
“All small business owners know having access to good sources of finance is the difference between success and failure.
But as this research clearly shows, businesses can no longer rely on traditional sources of finance, like banks and credit cards. This means accessing alternative methods of finance, like peer-to-peer lending or equity crowd funding.
Small business owners have enough on their plate without spending days researching and trying to understand what the best finance option is for their specific requirements. So what they need is more guidance in navigating the market and understanding how options measure up. Everyone wins if we can get this right.
It means more money to invest in the business, less time filling out forms, and more jobs and greater prosperity for Nottingham.”
Anna Soubry, Small Business Minister and MP for Broxtowe, said:
“Small businesses are Britain’s engine room and access to finance is a key issue for them, so I welcome the work BusinessFinanceCompared.com are doing to break down barriers.
The Government is working hard to support and promote alternative forms of finance so that small firms can access the finance they need to grow and strengthen the economy.”
Councillor Nick McDonald, Portfolio Holder for Jobs, Growth and Transport at Nottingham City Council, said:
“Access to finance is critical for entrepreneurs wanting to set-up and grow businesses in the City.
We know that it remains difficult for businesses to access finance through traditional methods which is why we are discussing with Government our desire to establish a regional investment fund as part of the D2N2 devolution deal which would be a one-stop shop to help businesses access the funds which would help them to grow.
We are supportive of all initiatives that improve access to finance for small businesses including the work that Nottingham based company BusinessFinanceCompared.com are doing.”
Tony Barnes, Barnes & West, a local brickwork contractor, said:
“The building trade can be unpredictable, and as a building contractor sometimes I need external finance to get projects off the ground.
I’ve always relied on my bank – it’s easy and I’m not completely sure where else to start.
But I also suspect there are better options out there, whether at another bank or even a new category of finance altogether. No one wants to waste money after all.”
Shaun Walsh, the owner of Business Growth Services, a consultancy service for SMEs, said:
“As part of my job, I meet businesses large and small every day. The one thing that they all have in common is that they don’t have lots of time to scour the market for finance. They want to quickly and easily know what their options are before they have to start filling in forms.
It can be hard to know where to start and it’s easy to understand why many just go straight to their high street bank.
With that in mind, sites like BusinessFinanceCompared.com are welcome, as they help small businesses identify their best options quickly and save their owners a lot of time.”