business SME lending Small business loan
Marketing No Comments

A third of small and medium-sized enterprises (SMEs) who sought access to finance were rejected last year.

Smart payments platform Yolt has found that SMEs lost an estimated £3.7bn in potential funding over the course of 2021.

The average SME sought to borrow £331,275 in financing to help grow their business, however, on average, small businesses only managed to borrow approximately £50,000 less than this.

Leaders of small businesses which were denied funding cited the age of their business (31 per cent), the levels of existing business debt (22 per cent) and the lack of sufficient collateral (20 per cent) as factors in the decision.

Contact us today to discuss Business Loans and how we can assist you..

Medium-sized businesses (50-250 employees) were the most likely to be refused for funding (56 per cent).

Even among the successful candidates, only one in five SMEs described the process of borrowing as easy, and less than 10 per cent felt the process was low effort or made effective use of technology.

Small business leaders said that they are very open to using technology to refine the borrowing process, with two-thirds (66 per cent) willing to securely share their bank account data to improve their chances of borrowing money.

This follows previous Yolt research which found that the sharing of data via open banking technology could significantly increase approvals and reduce the processing time of SME borrowing by 85 per cent, benefitting both the lender and recipient.

“SMEs represent the foundation for a thriving economy, in the UK they represent 99 per cent of all private sector businesses; as such, it’s important we nurture SME growth,” said Nicolas Weng Kan, chief executive at Yolt.

“Traditional borrowing, limited as it is, can make access to finance difficult. This can impede growth and make it hard for small businesses to achieve their true potential.

“We can see a clear desire from small business leaders in our research to use the power of their data and insight to allow for more accurate decisioning when it comes to borrowing money; open banking is the solution to this.

“By employing open banking technology, lenders can get a clearer picture of a business’ behaviours and can then provide financing with far more confidence: it’s not about taking on extra risk but accessing a great level of insight.

“This technology also makes the application process quicker and automated, allowing for efficiencies on both sides.”

By Michael Lloyd

Source: p2p Finance News

Leave a Reply

Your email address will not be published.