A report released today has revealed that small businesses’ trust in the banking system has declined over the past 12 months.
The study by the British Chambers of Commerce (BCC) was conducted in mid-September, and is based on a survey of 1,560 UK businesses. It found that 49% of businesses rely on banks and building societies for external funding, but a similar amount (50%) of all the firms questioned said they do not trust these institutions.
Over a third of respondents said they trust financial institutions less than they did a year ago, and almost four in ten are not confident in securing finance externally.
Although there has been a lot of talk about government-backed finance initiatives the survey revealed that 43% of businesses had not heard of any of the schemes, with the younger and smaller businesses more likely to be unaware of them. However, 59% of firms say a government-backed business bank would make them more confident about accessing finance.
John Longworth, the Director General of the BCC, which conducted the survey, said “Our findings suggest that the [political] parties need to focus on access to finance for Britain’s army of small- and medium-sized companies, and particularly growing companies, if they are to win the votes of Britain’s wealth creators, and the people who work in business, in years to come”.