A new report has found that just 10% of small and medium-sized business attempted to get finance in the last year. For those that did try there was good news as they were more likely to be successful.

The research was carried out by a venture capitalist firm called Albion Ventures. In the year before last, 17% of SMEs applied for funding with 71% of them being successful. That success rate has now risen to 80%

They also found that the reasons for seeking funding have changed as well. Whereas the majority were looking for extra cash to keep their business afloat, now more companies are hoping to expand with the extra cash.

Only 24% of businesses were out looking for working capital funding in comparison to 27% looking to develop their business and 23% who wanted to expand their offices.

Patrick Reeve, managing partner at Albion Ventures, said: “Demand for bank finance and the reasons for needing it are key proxies for the health of UK SMEs and there are reasons for optimism on both counts. Not only have

firms been more successful in applying for finance but their motivations are more about growth than funding working capital.

“Demand for finance is particularly strong among the growing band of so-called ‘threshold’ businesses with turnovers of between £500,000 and £1 million, which are on the cusp of becoming established companies.

“Twice as many of threshold businesses attempted to raise finance in the past 12 months and 68% of them needed capital to grow compared to 41% of other types of SMEs.”