Advertisement
  • Bank lending to small retailers falls 4% in just a year

    UK bank lending to small and medium sized retail businesses has fallen by 4% in the last year. ?14.9 billion was lent this year, down from ?15.6bn the year before.
    ?
    This is according to new research from Funding Options, an online business finance supermarket.
    ?
    The funding has reduced as banks concerned over abilities to deal with retail challenges.
    ?
    High streets are becoming hollowed out as more big retailers shift their focus to online.
    ?
    Smaller retailers need more funding to enhance their websites and improve their high street offering to compete.
    ?
    Smaller retailers risk going out of businesses as traditional forms of lending become harder to access.
    ?
    Retailers are finding it tougher to get credit from their own suppliers. This also creates extra pressure on cashflow.
    ?
    Insolvency Service data shows that insolvencies in the sector jumped by 13% in the year to September 2018.

    Alternative lending

    More small businesses are turning to alternative finance providers to combat the funding gap.
    ?
    A recent report showed that the use of alternative finance options by businesses have increased in the last year.
    ?
    Bank lending seems to be shifting away from smaller to larger retailers. Lending to large retailers has risen by 5% over the last year, to ?37.7bn in November 2018 from ?36bn the year before.
    ?
    Conrad Ford, CEO of Funding Options?comments: ?Retailers struggling to get lending must not give up the ghost. There are other forms of finance other than bank loans.?
    ?
    ?Many small businesses have characteristics, such as seasonality. That can mean they have different risk profiles. Being a seasonal business can mean inconsistent income, and cashflow. This can make it hard to maintain the regular loan repayments.
    ?
    ?There are alternative financing options available that can support growth and investment. These options are often flexible and accommodating.?
    ?
    ?The more retailers are aware of these options, the better.?

    Related Articles

    Leave a Reply

    Your e-mail address will not be published. Required fields are marked *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Close