Traditional finance for SME’s in Decline?

According to research by BDRC Continental SME’s are relying less on ‘Core’ traditional finance options (overdrafts, loans and credit cards) today, than in 2012.

In Q2 2012, 36% of SME’s were relying on a number of business forms of traditional finance, but that figure has dropped to just 30% in the same quarter of 2014.

The upturn in the economy will undoubtedly have played a large part in this along with the use of external sources of funding, but it may also point to the fact that businesses are managing their cash flow better and holding more in reserve.

Tony Jadzevics, Director at Evans Weir, comments “I like to take the positives out of this research so I believe it shows an upturn in the economy and better management by smaller businesses, resulting in less needing to find alternative sources of cash”. He continues, “We know that banks are demanding more before they will lend and that is not going to change so businesses have had to respond and I think that is what we are seeing here. It can only be a good thing”.

We report on the latest announcement from HMRC on RTI penalties here.