Tag Archive | "NACFB"

New initiative may help SMEs access finance

A new initiative between the National Association of Commercial Finance Brokers and the Institute of Certified Bookkeepers could improve access to finance for small businesses.

The scheme is currently being piloted in Derbyshire, Leicestershire, Lincolnshire and Nottinghamshire.

Garry Carter, the chief executive of the ICB, said the programme brings together bookkeepers and brokers and if the trial is successful, it will be rolled out nationwide. Members of the ICB who devise successful funding proposals for their clients or employers will be rewarded with a share of the commission on the deal.

Carter went on to explain that it has to be established who, particularly in the micro-business sector, is looking for funding. Once that has been established, the emphasis must be on making sure they have credible plans.

Before lenders will consider making funds available, they need to see that a business is properly run and this means providing up-to-date accounts, accurate projections and a SWOT analysis.

A recent study by the NACFB found that there has been a slight improvement in funding recently but it’s still not enough. Accountants and other SMEs still find it difficult to access the funds they need in order to expand.

Businesses have been looking for better ways to borrow and the number using invoice finance has increased for the fourth consecutive year. There has also been an increase of 3.5% in the number of firms using asset finance, however asset finance brokers are now struggling to find funders.

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Slight increase in SME funding but it’s still not enough

The SME community is still having problems raising funding and at the same time has to cope with increased costs, Adam Tyler, the chief executive of the National Association of Commercial Finance Brokers, said recently.

The latest survey from the NACFB shows that although funding has improved slightly, it is still very difficult for SMEs, including accountants for contractors looking to grow, to access. Funding is now coming in a variety of different ways and from a wider range of lenders, he said.

In the past twelve months, there has been a 3.5% increase in asset finance and a rise of slightly over 6% in commercial and sme mortgages. But short-term lending shot up by a massive 180% over the past year. Asset finance brokers have been struggling to find funders, but more smaller lessors have entered the market.

The number of companies using invoice finance increased for the fourth year in succession and this shows that businesses are looking for more cost effective ways of borrowing. Although 90% of small firms bank with the four major high street names, they are looking to alternative sources when it comes to borrowing.

Members of the NACFB have access to nearly 70 providers of business finance, Tyler explained. Companies do want to grow and they do want to borrow and yet a recent survey shows that only 16% of SMEs have asked their banks for funding, and of those, one third were refused.

David Connell from the Cambridge Judge Business School says that the government treats small businesses as an afterthought when allocating innovation funding and it should adopt a similar system to the US where projects receive 100% funding.

He explained that the 50% of costs allocation given to small firms isn’t appropriate as they are cash poor and lacking in venture capital.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Autumn leaves at the top of the weir by Steve-h

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