London firms are facing problems as access to credit is still considered a “roadblock” to getting new investment.
This has lead to an increase in companies researching alternative methods to raise some cash. In the first three months of 2014, one in four London small businesses done so, with a third thinking about using peer to peer lenders. This comes as the FCA’s rules for crowdfunding came into force this month.
It seems that getting credit is still a difficult task. 30% of the firms who went after credit were rejected. That’s an increase of 23% from the last three months of 2013. Just 5% of small companies think bank financing is falling. This is while the Coalition Government have been making noises about improving the situation.
Christina Hamilton, the UK managing director for Western Union Business Solutions who carried out the survey, said: “Access to credit continues to be a roadblock to growth. Funding remains elusive and prohibitively expensive for many London SMEs and it is little wonder that businesses are looking for alternative ways to raise finance.”
According to the Bank of England’s latest Trends in Lending report overall business lending is down by 2.1%, which doesn’t speak well to the Government’s efforts to bring it up.
Image by Chris Brown.