‘Keeping afloat’; the recurring reason for UK SME funding

Liberis research shows 30% of the UK’s small businesses require funding for survival, with ‘keeping afloat’ cited as a top five reason for funding request[i] 

Research published today by leading small business finance provider Liberis finds that nearly 30% of UK SMEs require funding simply to stay afloat.[ii]

Across a broad range of criteria made available for business owners, ‘keeping afloat’ scored amongst the top five reasons for finance requests; with ‘purchasing new equipment’, ‘keeping up to date’, and ‘other operating costs’ also scoring highly.

The research also found the most common sum of a request was of around £30,000 and was required to take the business to the next-level.[iii]

Today, there is an understood resistance from banks to lend to UK small businesses, prompting concern on the wider impact on UK small business survival rates.[iv] Liberis’ research also found there is a perceived reluctance among UK banks to invest in risk and innovation, indicating a demand for alternative financing options.

As the lifeblood of the UK economy, SMEs contribute more than £200bn a year[v], with this number expected to grow by almost 20% by 2025. Yet, without a vital cash injection, this 2025 vision will be severely stinted.

With 62% of UK small businesses[vi] viewing funding as a mechanism to grow, it is worrying that 55% are unable to access this required funding.  Concerned for the growing pressure and expectations on banks and other mainstream finance providers, alternative financing providers such as Liberis, can provide a simple, flexible and transparent funding system to help UK SMEs achieve their ambitions.

Partnering with companies including Worldpay, Sage Pay and JustEat, Liberis has a direct reach over 750,000 UK small businesses and supports SMEs in obtaining cost-effective funding.

Commenting on the report, Rob Straathof, CEO at Liberis, said: “In an increasingly uncertain economic climate, there is a greater need to protect our small businesses and provide them with much needed working capital. Liberis occupies a space which has been left empty by the traditional role of banks and lenders to provide financial support to small businesses. We’re on a mission to support small businesses and help them reach their goals.  From the local bakery to the neighbourhood pub, we’re here to provide a lifeline to keep them afloat.”

Earlier this year, Liberis announced a funding investment of £57.5million to support an estimated 100,000 jobs by 2020. The amount was secured in combined funding from British Business Investments, Paragon Bank, BCI Finance, and Blenheim Chalcot, the UK’s leading digital venture builder; and demonstrates Liberis’ long-term aim in supporting UK small businesses through such partnerships.

Straathof, added: “The traditional channels of business loans and funding are, in today’s ever-changing world, no longer able to operate at the same capacity at which they were once expected. In fact, the total amount of bank overdrafts and loans outstanding to small businesses has decreased by nearly £6 billion of the past 5 years according to UK Finance Q2 2018 research. This has enabled Liberis to protect UK businesses as we aim to provide much needed working capital – not only based on credit history, but business potential too – whilst delivering a trusted financial product through credible partners.”

To date, Liberis has helped over 8,000 SMEs, advanced £250m in funding through its Business Cash Advance and supported over 35,000 jobs in the UK.[vii] Moving forward, the company aims to further empower small businesses, broadening customer reach through strategic partnerships and international expansion.

[i]Liberis Q2 Research, August 2018

[ii]Liberis Q2 Research, August 2018

[iii]Liberis Q2 Research, August 2018

[iv]The Financial Times, March 2018

[v]January 2018

[vi]Liberis Q2 Research, August 2018

[vii]Since 2007