Over a fifth of mid-sized businesses have lost out to competitors as a result of funding delays
Delayed finance approvals are having a significant impact on the UK’s mid-sized businesses, with more than one in five (22%) losing opportunities to competitors as a result of funding delays.
New research from Shawbrook’s report, The M Agenda: The Medium-Sized Business Gap, reveals the commercial consequences of waiting for funding at a time when businesses are under pressure to act quickly on growth opportunities. In a competitive market, delays can mean the difference between securing an opportunity and watching it go elsewhere.
The price of waiting
For medium-sized businesses, the results of funding friction are felt across every level of the balance sheet. According to the research, a quarter (25%) of leaders say their applications have been delayed, while 22% report that the approval process simply took too long.
These delays have led to a series of setbacks:
- 22% had to delay significant investment
- 20% have been unable to purchase new equipment
- 18% have been unable to hire the staff needed to grow
- 19% have been unable to complete a planned exit
And delays are causing reputational damage. More than a fifth (21%) of mid-sized business leaders say their professional credibility has been harmed due to their inability to move at pace, while 18% report losing partners or clients entirely.
Due to hold-ups receiving vital funding, many business owners have been forced to settle for sub-optimal solutions. Indeed, 21% of mid-sized firms admitted they had to seek out quicker but more expensive finance alternatives to keep their growth plans on track.
Neil Rudge, chief banking officer at Shawbrook, said: “In the mid-market, timing is critical. Whether it’s upgrading equipment, a new hire, or the leap into a new market, these opportunities often have a narrow window of opportunity. Our research shows that businesses can miss out simply because funding options are not moving at a quick enough pace.
“This is backing mid-sized businesses into a corner – either they lose out to competitors, or they are forced to settle for more expensive solutions just to stay in the race. For the UK economy to thrive, it’s important that the funding available to these firms is as agile and ambitious as the businesses themselves.”