A report by the British Business Bank on the SMEs “journey to raising finance” has brought up some interesting points:
“Most SMEs do not shop around when they need finance. They typically just approach their main bank...Most SMEs spend less than an hour considering their finance options.”
“45% of SMEs that had sought finance in the last 3 years did so in order to obtain working capital or for cashflow. For those that sought working capital, the main reason was to cover a short term funding gap until funds were received from customers (54%).”
Okay, so these statistics would imply that SMEs are screaming out for Invoice Finance! The good news is that 68% of those SMEs surveyed were aware of Invoice Finance and 48% knew where to go.
However when actually committing to a finance partner, most SMEs still take the traditional option and not necessarily the easiest or best option.
The Big Challenges for Invoice Financiers Are:
1) How do they get their message across, and
2) How do they make it easier for SMEs to use their services?
We look to address both in our Swift Fund Facility.
Issues for Introducers
The survey also looked at advisors to SMEs:
“The majority of those that sought finance in the last 3 years (84%) received no advice. The main reason for this was that they did not think it was needed (67%), or that they did not think it would make any difference (24%).”
On the positive side, when advice was sought 90% of respondents found it to be useful. The conclusions for both Financiers and Business Advisors is that there is still huge potential in the SME market and we both need to continue to put efforts into making SMEs aware of their choices and the value of considering alternative sources of finance, other than their bank.
If you are interested in becoming an Introducer to Calverton please Contact Us here.