Most British and American Firms Think Banks Are Failing Them: Poll

September 02 20:00 2019

London, UK – The majority of companies in Britain and the United States have experienced cash-flow problems and don’t believe banks offer them sufficient support to get past the business-imperilling dilemma, according to the results of a new survey.

In a survey conducted by Pollfish in July, on behalf of business finance provider Convertibill®, business owners from both countries were asked for their opinions on business finance solutions and providers. The majority of the survey respondents (54%) had experienced cash-flow problems before and, therefore, have been in a position where extra funding could have solved financial difficulties.

A Lack of Faith in Banks

Big banks are approving more loans and the UK government is injecting more funds into bank loans to give local businesses a boost with Brexit looming. But still, business owners appear to have lost faith in financial support from banks.

The survey into business owners’ attitudes towards banks and alternative finance providers showed that 58% of business owners don’t think banks offer adequate support to businesses with cash-flow problems. It may take more than extra available funding for banks to win over the trust and loyalty of businesses.

Of those who said they don’t think banks offer businesses enough support, 54.31% had previously experienced cash-flow problems, 35.34% hadn’t and 10.34% didn’t know or preferred not to say whether they’d had cash-flow difficulties.

Interestingly, a higher percentage (57.14%) of business owners with low (less than $50,000) to mid-range ($50,000 to 100,000) incomes showed a lack of faith in banks compared to high-income ($100,000 or more) business owners – only 51.52% of high earners didn’t think banks offered enough support. While this is still the majority of each income group, this perhaps demonstrates banks’ reluctance to lend to those who need it most – small and medium businesses.

Backing Away from the Banking Sector

Businesses that feel banks aren’t offering enough support are increasingly turning to alternative finance providers. 65% of the survey respondents stated that they would be open to seeking financial help outside of the banking sector, and 22% said they didn’t know enough about alternative finance to say. Only 13% of respondents wouldn’t consider seeking alternative financial help.

The opinions of business owners proved unanimous across all income groups – low (less than $50,000), middle ($50,000 to 100,000) and high ($100,000 or more). The majority of each income group agreed that banks don’t offer enough support and that they would consider alternative finance solutions if they needed financial help. Interestingly, high-income business owners were the most likely to consider alternative business finance – 75.76% of business owners who earn over $100,000 per year stated that they would be open to seeking alternative financial help.

However, while business owners are open to alternative finance solutions, that’s not to say they necessarily know a lot about the solutions available to them. The survey asked which means of business finance the business owners had heard of before, and while nearly all (80.5%) knew about traditional bank business loans, significantly less knew about alternative forms of finance. Customer finance was the most well-known form of alternative finance – 45% of business owners were aware of it. But even fewer business owners had heard of invoice finance (19.5%), supplier finance (23.5%) and order finance (8%).

Mark Grimes, Finance Specialist, Convertibill®, said that businesses are starting to open up to alternative lenders and realise the benefits of non-bank financial solutions.

“We’re not all that surprised that so many companies have experienced cash-flow troubles and aren’t getting the help they need from banks. And it’s understandable that people are still learning about non-bank finance solutions – alternative finance is a new concept for many,” he said.

“The good news is there is help at hand to stop cash-flow problems from spiralling out of control. Rather than struggling with financial issues alone and facing the danger of going bust, businesses can solve cash-flow problems and fuel growth with the help of the right non-bank lender.”

For more information about the survey or Convertibill®, or to schedule an interview, please contact:

Mark Grimes, Finance Specialist

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Company Name: ConvertibillĀ®
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