Small and medium-sized enterprises (SMEs) are struggling to access finance and
working capital, according to a report published by the Association of Chartered
Certified Accountants (ACCA).
The ACCA's data showed that small firms are struggling to access finance for a
range of reasons, including rising interest rates. 57% of firms reported that
borrowing in order to manage cashflow has proven more difficult over the last
quarter when compared to the previous 12 months.
47% stated that supplier credit is now harder to access, and 27% said that
accessing support from HMRC's Time to Pay initiative is harder.
Small firms also found late payment to be a 'persistent problem' in the UK,
creating barriers for cashflow throughout supply chains and leading to adverse
consequences for some businesses.
Late payments by large businesses have the most detrimental impact on small
firms, the research revealed: late payments from large firms generate a 'domino
effect' throughout supply chains.
Glenn Collins, Head of Technical and Strategic Engagement at the ACCA, said:
'More effort is needed in encouraging banks to reach out to the SME community
and to provide more suitable financial products.
'Equity finance offers an alternative route to raising funds. And government
needs joined up thinking to make sure it is not accidentally restricting the
flow of finance to this crucial sector.'
Internet link: ACCA website