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Keywords: finance, invoice finance, Bibby Financial Services, small and medium-sized businesses, SMEs, funding, funding schemes
Sarah Feurey | News | 27 August 2012
It's no surprise that invoice financing has become a popular way for companies to access the working capital they need considering the difficulties many are facing getting credit from banks.
A new survey by Bibby Financial Services has shown that 32% of companies have been unable to secure any finance through traditional channels in the last year, and of those that could only 9% received the amount of funding they applied for.
The invoice finance provider surveyed 1,000 small and medium-sized businesses in the UK and found that 19% of those who've applied for funding over the last 12 months have been unable to raise enough capital to invest in their business.
According to Edward Winterton, commercial director at Bibby Financial Services, the findings of the research serve to highlight the gap that exists between the supply of funding and the demand from UK businesses.
"The results are further proof that businesses desperately require greater access to finance and that to date, schemes introduced by the government to address the issue have failed to work," he remarked.
"Over the past few years we have seen a raft of different funding schemes and initiatives introduced, such as Project Merlin and the National Loan Guarantee Scheme, however none have delivered real and lasting benefits to the small business community."
Mr Winterton stressed that banks are not the sole source of credit for struggling companies and suggested that alternative forms of financing, such as invoice finance, be promoted more widely.
His comments come after the Campaign for Regulation of Asset Based Finance accused some invoice financing companies of behaving unacceptably by profiting from business failures.
Speaking to the Telegraph, the group's leader Brian Moore claimed that in some cases the termination and collection fees that are charged when firms go into administration are being abused.
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