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Brokers Have Untapped Client Base In SMEs

by Jim ONeil on July 28, 2011

in business loans

According to news reports, banks are not lending to small and medium-sized enterprises, often called SMEs. The latest reports indicate that these businesses are now reluctant to apply for funding. The SME Finance Monitor recently found that just 15 percent of UK SMEs have applied for loans bank provided within the past year.

This recent British Bankers’ Association-commissioned survey is the most extensive SME finance-related study ever undertaken in the UK. Approximately 5,000 telephone interviews were conducted with businesses that had turnover of up to £25 million.

More than half of potential loan applicants reported feeling discouraged by banks or anticipated refusal.

The 15 percent of SMEs that wanted to apply for funding but did not may have held back out of fear. Whiteaway Laidlaw Bank New Business Director Stephen Johnson explained that some SMEs are worried about banks questioning why they wish to extend funding and overdrafts.

The businesses fret that approaching banks for cheap loans could result in loss of existing facilities.

With increased number of staff holidays during summertime, these months are not the time to put facilities at risk. Small firms often turn to bank loans or overdrafts to carry them through until new orders begin flowing.

The fact that the financial climate has discouraged them from doing so this past year is good news for brokers.

The broker market serves as an intermediary between SMEs and banks. Skilled brokers know which lenders are more likely to approve an SME loan application. They are able to prepare a winning loan proposal from a company with a poor credit history.

Brokers are in an excellent position to advise SMEs regarding the most appropriate lender for the desired financing. Rather than being discouraged regarding anticipated rejection, SMEs should consider working with a broker to streamline the borrowing process.

william james

Is it possible to get a business loan if i have a poorcredit score without being bombarded with calls from foreign call centres with staff giving english names and demanding up front payment to have the funds released within thehour ?

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