BDRC Finance Monitor says half of those applying for loans for first time are rejected compared with fifth of those reapplying
Small businesses warn today about the “parlous” state of the banking industry as the latest data shows that first-time applicants for loans have been finding it increasingly difficult to obtain loans.
The quarterly BDRC Finance Monitor for small and medium-sized enterprises (SMEs), commissioned by the banks’ business finance taskforce, shows that half of all those applying for loans for the first time are rejected, compared with a fifth of those reapplying for finance.
Shiona Davies, director at BDRC Continental, said: “Borrowing by first-time applicants remains a challenge, but overall most SMEs that apply will be successful.”
Confidence among those seeking loans that they will be successful has increased, after a series of declines, although appetite for borrowing is limited. More than half of SME owners had made a personal injection of cash or used a personal bank account, rather than a business one, to fund their business.