Small- and medium-sized businesses face significant challenges in both financing and growth, according to recent research commissioned by specialist bank Saxo Payments Banking Circle.
The survey also found that, when seeking financing options, small- and medium-sized enterprises (SMEs) were far more likely to select a bank or finance source if they could provide mentoring, additional expertise or lower rates.
Non-bank financing also an option
According to the research, 58% of SMEs would consider finance from a specialist banking source if it provided lower interest rates, and 44% would prefer lower arrangement fees. Additionally, around 25% would be attracted to a non-bank financing option by a simple, online account management system.
On top of that, businesses were especially drawn to add-ons like the mentoring and business advice offered as part of lending services at specialist banks.
With around 23% of UK SMEs missing out on "at least one key opportunity" due to a lack of funding, it is thought that small businesses could be losing out on an average additional income of £78,942 a year.
The merits of mentoring and expertise for SMEs
Mentoring and expertise is invaluable for growing businesses and can benefit SMEs in several ways. Specialist banks can aid in everything form providing general financial guidance and helping with cash flow management, to building lasting business partnerships and suggesting strategies for future funding.
The report noted that SMEs "form the backbone of the UK’s economy" (Saxo Payments Banking Circle) and as such asked experts how best to assist SMEs and whether or not mentoring services should be offered alongside lending products.
“As a specialist bank, we lend expertise as well as money,” said Stuart Hulme, marketing director at Hampshire Trust Bank. “It’s important to remember that SMEs are not always aware of what is needed to grow, both from a strategic standpoint, but also from a legal and company law perspective."
By offering knowledge and expertise as well as money specialist banks stand to offer invaluable insights which could help to SMEs to grow their business.
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