Business Finance News From United Kapital

Banks Still Not Lending Vital Funds To Businesses

Tuesday 27th of September 2011

According to the latest statistics Britain's retail and high street shops have seen a 2.6% drop in sales and customer numbers in the last year. With the economy struggling to get back on its feet, many businesses are looking to the banks to receive short term business loans to help tide them over financially. However, according to the latest reports, despite the banks saying they will lend to more businesses the actual reality is that they still aren't.

Small business loans are vital at this time more than any other. They can be used for a number of reasons, such as paying for a refurbishment, paying for security, bulk ordering more stock, hiring more staff, buying a company vehicle, or even training, marketing and advertising. The list goes on.

There are so many useful things that the money can go towards, as well as more crucial things like improving cash flow or paying off creditors, settling bills or paying rents. If banks are not lending, this makes it very difficult for the thousands of struggling businesses to stay afloat through the difficult economic downfall.

The trouble is that banks have no sanctions so they are only "nudged" to lend to small businesses rather than enforced to do so by the Government or financial figureheads.

Furthermore, small businesses are worried about applying for the loan in the first place. They are afraid that with the bad press banks will turn their application away and this will not look good on their credit history. The time it takes to go through the application process is also off putting, so many businesses simply do not bother applying for the money at all.

It is also recognised that there is a funding gap for start up companies who need the extra credit to really get themselves off the ground. Therefore start up companies have to rely on the help of families and friends for investment unless they can secure investment by other means, which has become increasingly difficult in the last few years.

However, there is hope on the horizon. Some business cash advance companies are much more open to helping smaller businesses by offering flexible repayment options and quick finance. These can be found mainly on the internet and many have high approval rates. With SMEs being dubbed "the future" of the British business outlook it is important that these companies are given the financial freedom to flourish in order to grow and develop, rather than buckle under the pressure.

One start up business owner said, "With the right investment, you can go far with your business, developing it in the way you need to without worrying that you don't have the financial backing to do so."