Accountants Detect Signs of Financial Stress as SME Growth Wobbles

Just 9 per cent of businesses reported new loan applications over the last twelve months. Independent researcher BDRC Continental released its most recent report, the SME Finance Monitor, today.

It is deemed by the Association ofChartered Certified Accountants (ACCA) to be the leading record of UK SMEs access to finance.

The figures were based on 5,000 interviews with SME owners and managers, undertaken between October and December 2011.

Only 9 per cent of businesses reported any applications for new loans in the past year, down from 12% and 15% in the last two quarters respectively. Just 8 per cent anticipated that they will apply over the next year. Only 41 per cent reported using any external finance, down from 51% six months ago; deleveraging seems to be the strongest amongst small businesses. 44 per cent of SMEs expect to grow in the next 12 months, with 47 per cent planning to remain the same size.

How this is going to be achieved is questionable given that few SMEs are going to be applying for finance. Furthermore, average and higher-risk businesses are gradually skipping out of the loan market altogether.

SMEs anticipate that their finances are going to become increasingly precarious.