Almost half (47%) of small businesses who have applied for a loan in the past three months have been turned down by their bank.
A new report from the Federation of Small Businesses (FSB) revealed this is having an impact on business owners’ faith in the banks. More than half (56%) of firms surveyed said they thought banks cared little for small businesses. Just 16% said banks are supporting of small businesses.
As a result, 40% of FSB members surveyed said they were aware of peer-to-peer lenders, and nearly half expressed interest in credit unions.
John Allan, national chairman of the FSB, said “As much as a culture change in the banks, we must diversify the lending landscape as a whole. We fear that without real competition in the banking sector, small firms will only have the high street banks to turn to. We therefore urge the Government to maintain their efforts to promote non-bank sources of finance and thereby increase choice for small firms as well as competition in the market.”