A new survey by the British Chambers of Commerce (BCC) has revealed a staggering lack of knowledge about alternative finance options amongst businesses.
The BCC survey of 1,000 businesses has shown that, while 93 per cent of firms were familiar with traditional bank overdrafts, only 19 per cent were aware of newer mezzanine finance options.
The companies surveyed were most familiar with bank loans (88 per cent), commercial credit cards (86 per cent) and leasing/hire purchases (86 per cent). In comparison only 38 per cent had heard of angel finance, 42 per cent recognised P2P lending and 46 per cent had some understanding of trade finance.
Within the last 12 months, around 48 per cent of those surveyed had applied for finance; however 54 per cent who secured finance rejected the terms offered due to high interest rates, while 39 per cent said the collateral required was too high.
The study also found that 21 per cent of businesses felt that the availability of finance had declined over the past three years, while 23 per cent said that it had improved.
Dr Adam Marshall, acting director general of BCC, said: “At a time of transition for the economy, government help can play an important role.
“So there is work to be done to raise awareness among businesses of schemes such as the British Business Bank, which was set up by the government to make finance available to firms via banks and alternative lenders to promote business growth.”
LINK: BCC Finance Study