The Aldermore Future Attitudes report reveals that a fifth (19%) of all small and medium-sized enterprises (SMEs) – equating to 1.04 million firms in the UK with under 250 employees – miss out on at least one new business opportunity in the past 12 months due to a lack of available finance.
The report, which surveyed over a thousand senior business decision-makers across the UK, found that the financial repercussions of when SMEs miss these new business opportunities are considerable; on average British firms are missing out on income worth £77,651 a year.
Medium-sized businesses – those with between 50 and 249 employees – are the worst hit, with almost a third (32%) saying that they have been significantly impacted by not having access to the funding they need. This amounts to an average impact on income of £112,508 per organisation affected over the past year.
This compares with more than a quarter (28%) of small businesses (10-49 employees) missing out on new business opportunities, 15% of micro businesses (under 10 employees) and almost one in ten (9%) sole traders.
When asked what proportion of their business is financed by different forms of funding, the research revealed that traditional bank lending, including overdrafts and credit cards, finances almost a fifth (18%) of SMEs’ business. Alternative finance, including asset finance, invoice finance and crowdfunding, provides 14% of finance accessed by SMEs.
Carl D’Ammassa, group managing director, business finance at Aldermore, said: “With more than two fifths of SMEs saying that their key business priority for 2017 is achieving business growth, it is frustrating to see that so many firms are missing out on business opportunities due to a lack of appropriate funding. In our experience, UK SMEs have retained their ambitions to grow despite the uncertain economic environment, so it is vital that the finance industry gives them every chance to succeed.
“As a lender focused on supporting SMEs of all shapes and sizes, we also want to educate businesses about other more bespoke, flexible and cost-efficient funding options available to them such as asset finance and invoice finance.”