Who do SMEs ask for financial advice?

New research from the Business Banking Insight (BBI) has found that younger small to medium sized businesses tend to stray away from older companies when seeking out finance and information when attempting to expand the business.

BBI reported that “an ICM poll of 5,000 SMEs across the UK found that 42% of businesses formed after 2010 would consider approaching acquaintances and relations for business investment and 64% of these businesses would turn to their friends and family for guidance around finance.

This compares to just 22% of businesses created pre-2000 who would think about using this type of finance and 45% who would ask their nearest and dearest for information.”

Alongside this, 36% of companies that were created after 2010 said that they would consider peer-to-peer lending in order to expand their business, in comparison to the 18% who had the same attitude but were from firms that were created before the year 2000.

Federation of Small Businesses Policy Director and spokesperson for the BBI, Mike Cherry, explained that the BBI can help the business get the right advice. “Accessing the best product for your business is critical to growth and future investment,” Cherry said.

John Longworth, Director General of the British Chambers of Commerce and spokesperson for the BBI, also felt the same way. “The divide between older and newer companies in attitudes to seeking business finance and guidance highlights a change in approach by businesses’ to driving growth. The finance needed to drive growth can and should be tailored to the specific needs of each business, so it’s vital that traditional lenders and advisers adapt to meet the changing demands of SMEs,” Longworth highlighted.

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