A new survey has revealed that 37% of Midlands businesses have no confidence in their knowledge of finance sources outside the banks, 3% more than the national average of 34%.
The insights come from a new survey conducted by business finance provider Growth Street. The firm canvassed more than 2,000 employees and directors of British SMEs in January 2019, following up from its inaugural survey in 2018.
As hundreds of millions of RBS competition fund pounds are distributed to challenger banking brands, Growth Street’s findings shine a light on an under informed business demographic in the Midlands.
Growth Street’s survey does, however, highlight a decreasing reliance on banks as their predominant source of finance, despite low understanding of alternative options. The Midlands, at 36%, is on par with the rest of the nation’s SMEs (35%) who stated that they had considered going somewhere other than their bank when thinking about funding their business.
In Birmingham, this figure is even higher and on the rise: 40% of respondents had considered going somewhere other than a bank for their finance, up from 30% last year. This is exactly on par with London respondents.
Across the UK more broadly, people’s understanding of alternative finance options is shown to be on the increase. 34% of respondents said that they were not at all confident in their knowledge of non-bank funding, significantly fewer than the 45% of respondents who attested to the same lack of knowledge in 2018. 66% of respondents had at least some knowledge of finance outside of banks, up from 54% in 2018.
Greg Carter, Growth Street CEO, comments:
“With a greater focus placed by government on funding growth in the Midlands, it is crucial that Midlands SMEs are as clued up as possible when it comes to financing their businesses to take full advantage. Clearly, huge progress is being made, but keeping the momentum up moving through 2019 will be central to the region’s success.”
“That responsibility is with finance providers from across the spectrum – the fact that nearly a fifth of SMEs in the Midlands don’t know where they would go first when seeking finance paints a worrying picture of the disparity between London and other fast-growing parts of the UK. Greater emphasis needs to be placed on tapping into Midlands business people, both by traditional banks and alternative finance providers, to ensure continued growth following the challenges facing the UK”