Despite the bad weather and post-Christmas gloom, January is an exciting time for any SME. Though daunting, there is an entire year of potential growth and expansion lying ahead. However, many of them will be met with frustration when they attempt to make their ambitions a reality.
Research from Hitachi Capital has revealed many SMEs are still facing obstacles in their attempts to gain finance. Over 1000 small businesses were surveyed with 34% of respondents still feeling disconnected from banks. Left out in the cold, SMEs don’t just want a closer relationship with banks. The research has shown further work can be done for banks to get in touch and initiate a partnership.
When dealing with such huge banks, 28% of the SMEs surveyed want more transparent fees and charges. Keeping control of costs is critical for businesses in their early stages so management need to know what the exact price of financing will be. More transparency around pricing would also help an SME shop around for the right deal for them.
Another 26% of the businesses surveyed want more flexible financing options. Banks, because of their huge size, are not always able to tailor financing solutions to each business. This is very important for SMEs as they will want to ensure the loan is appropriate to their specific needs. An ill-fitting term period or repayment plan could end up being more counterproductive than the original loan’s intention.
Additionally, 26% of SMEs want to see more competitive lending rates. Any business owner who has spent time and effort planning their strategy for the year ahead will want to ensure they have chosen the best rate possible on a loan. The more choice and variety available, the better their chances are of getting an attractive rate that is right for the SME.
A different approach
Banks, who arguably have a lot on their plate right now (particularly Brexit and uncertain economic times), can only do so much in their efforts to reconnect with SMEs. Peer to peer lending is the flexible, speedy and cost-efficient financing option for many SMEs.
At LendingCrowd, we make it our mission to work closely with SMEs to understand their business and the loan that is right for them. We are privileged and excited to be able to do that and look forward to working with many more SMEs throughout 2017.
Why not quickly find out if your business is eligible for a loan with LendingCrowd?