Close to one in three small or medium-sized enterprises (SMEs) in the UK need funding simply to stay in business, according to a new piece of research on the subject.
The small business finance firm Liberis carried out the study and found that “keeping afloat” was the most commonly cited reason for seeking out finance among company bosses.
Other common reasons for requiring fresh funding included a desire to purchase new equipment, to keep up to date with competitors and a need to cover general operating costs.
The most commonly requested amount of money among the SMEs polled by Liberis was £30,000, with many seeking to push their operations on to a new level of effectiveness and profitability in order to better ensure longer term sustainability.
Liberis is highlighting the issue of SME funding in response to some of the difficulties that small businesses around the UK have come up against in recent years when it comes to seeking finance from traditional mainstream lenders.
A relative reluctance among banks and other mainstream lenders to offer loans and other forms of finance to SMEs has led to a rise in the prevalence of alternative lending sources.
To underline its argument that SMEs need more financial support beyond the mainstream, Liberis points to UK Finance research which shows that the past five years have seen bank loans and overdrafts to small businesses decrease in overall value by as much as £6 billion.
The business finance company also points out that SMEs make an enormous contribution worth an estimated £200 billion each year to the overall value of economic activity in the UK.
“In an increasingly uncertain economic climate, there is a greater need to protect our small businesses and provide them with much needed working capital,” said Rob Straathof, Liberis’ chief executive in a statement.
“We’re on a mission to support small businesses and help them reach their goals,” he said. “From the local bakery to the neighbourhood pub, we’re here to provide a lifeline to keep them afloat.”