Study reveals SMEs are getting credit

| July 11, 2011 | 0 Comments

A report has revealed that the majority of small and medium-sized enterprises (SMEs) are successful when applying for credit.

According to the study, more than half (59%) of applicants were successful when applying for a loan, while 72% who applied for an overdraft were successful.

The figures come from the latest SME Finance Monitor report by market research firm BDRC Continental, which questioned 5,000 business owners.

The report comes shortly after figures showed that banks loaned £16.8 billion to SMEs in the first quarter – around £2 billion short of target.

Under the Project Merlin deal, agreed earlier this year, the big five banks all committed to lend around £19 billion every quarter to SMEs.

As a result of the shortfall, it was announced last week that the UK’s five largest banks: Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Santander, have launched a scheme aimed at providing support and financial advice for SMEs.

The latest initiative was established by the business finance taskforce and will offer firms support in areas such as finance, marketing and HR.

In the meantime, commenting on today’s report, the Federation of Small Businesses (FSB) said the key figure was the low percentage of firms actually applying for loans.

FSB chairman, John Walker, comments: “Small firms have been telling us for the past few years that they are fearful of approaching the banks for new finance, or to extend an overdraft, because they know they are likely to be turned down, or be offered a deal on terms that just aren’t favourable for them.”

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