Businesses Not Taking Out Finance, But I'm Cynical

The number of small businesses that have used a bank overdraft or loan has fallen during the past two years, according to a new survey by the Federation of Small Businesses. Polling more than 11,000 FSB members, the survey found that only 35% used an overdraft in 2011, 11% a secured bank loan and 7% an unsecured bank loan. This is a drop of -8%, -3% and -4% respectively since 2009. The survey also found that 33% of respondents had used their own savings or inheritance to fund their business. The figures suggest that new businesses could still be finding it hard to access finance, as 70% used savings and inheritance to fund their business, 34% got money from friends and family, and only 25% used a bank overdraft. John Walker, national chairman of the FSB, said: "Even though overall lending is above target, this shows that money is going to bigger businesses rather than new and fledgling firms that need it to take advantage of growth opportunities that are there even in these challenging times. "Our research in the last two years shows that around a third of businesses are refused credit, and this could be reflected in the fact that newer businesses are using more of their own money to fund their business rather than turning to the banks for help. “What we need to see is better promotion of the alternatives available, and for the government to put in place their bold credit-easing plans which will help small businesses access finance on better terms." I'm Cynical: I can't help feeling that this disguises the fact that banks are not granting business loans and where they to do so the above stats would be completely different.  source article: businessmoney.co.uk cynical comment provided by enablefinance.com