• Bank Managers are being ditched and divorced, as Accountants, Lawyers and Finance Directors become the most trusted financial advisers according to 80% of SMEs
  • Lack of credit and cash flow is a worry for 43% of SMEs
  • Over a quarter of those surveyed admit that they would want more money for staff training and recruitment.

In a continued tough economic climate, SMEs need funding in order to survive and grow and are not aware of the range of funding resources available. New research of 1,000 UK SMEs from Hitachi Capital Invoice Finance unearthed SMEs attitudes and how they really feel about the state of funding available, and most importantly who they trust to keep their business on track.

The new research, commissioned to launch Hitachi Capital’s new simplified ‘Inspired Cashflow’ offer, signals that the nation’s SMEs are heading back to the days of money under the mattresses and loans from family and friends, rather than putting trust into their bank manager to look after their finances. It appears views and ways of working have gone back in time over recent years, as only 21% said they would trust advice from their bank manager, compared with the majority seeking help from their Accountant (43%) which came out top, then their Lawyer or Independent Financial Adviser.

John Atkinson, Head of Commercial Business at Inspired Cashflow, part of Hitachi Capital Invoice Finance, said: “We are in a very different business environment at the moment, not only are economic times tough, but our faith in the banks is at an all time low. This has created a difficult situation for businesses as companies don’t know where to turn, and because 43% of SMEs surveyed admit that cash flow is either a current problem or has been in the past year for them, it’s hard to hear that one fifth of those admit that their banks weren’t any help in solving this issue. With over a quarter of those surveyed admitting that they would want more money for staff training and recruitment.

“It seems many SMEs don’t even know the name of their own bank manager, and since a lot of business is done online, there is no personal attachment or face-to-face interaction like there used to be. Complicated online processes and fees from banks and service providers can lead to companies making the wrong choices and the misunderstanding of how services in the market work, such as invoice finance. It’s scary to see that nearly half of SMEs are sourcing finance from secured loans (20%), bank overdrafts (17%) and even credit cards (12%) – all of which are expensive methods of finance for SMEs -– instead of opting for cost effective and simple means. And what’s even more worrying is that other sources including, friends, family, life savings and selling assets were used by nearly 28% to increase finance and cash flow for their business.

“These issues with banks and SMEs gaining funding are nothing new – but continue to be concerning as many SMEs aren’t aware of the range of finance options available, such as the access to invoice finance services. This is something we at Inspired Cashlow are trying to address, especially since over 50% of SMEs have never heard of Invoice Finance before and don’t understand how it works. The launch of new products such as, Inspired Cashflow, aim to shake up the market and lay everything on the line with a simple honest and cost effective approach for businesses to free up cashflow from their balance sheets.”