“SMEs find banks ready to lend, the majority of businesses seeking loans or overdrafts had their applications approved” source SME Finance Monitor
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Apparently all is well in the SME lending arena, according to SME Finance Monitor. This is not the message that Pegasus Funding Resources are hearing from the funding community. A recent Bank advert says they accept 80% of applications (4 out of 5) for lending to SME’s. However the fact appears that of the 4 successful applications 3 are renewals of existing facilities!
Also a member of the NACFB (National Association of Corporate Finance Brokers) has discovered that perhaps 14 out of 15 cases don't get to the stage where they have the opportunity of being formally accepted or rejected, because if an application isn't likely to be approved, it just isn't put into the system. So some simple maths indicate that the true result of 75 “new” applications received by banks is that only one ever gets approved.
Also a member of the NACFB (National Association of Corporate Finance Brokers) has discovered that perhaps 14 out of 15 cases don't get to the stage where they have the opportunity of being formally accepted or rejected, because if an application isn't likely to be approved, it just isn't put into the system. So some simple maths indicate that the true result of 75 “new” applications received by banks is that only one ever gets approved.
Apparently another high street bank had a delicious term known as “constructive decline”, in that they issued offer letters that are so onerous that the borrower would never agree the terms. Still a notch on the lending bedpost as far as Project Merlin, the Government’s SME funding initiative is concerned!
But it is not all bad news! Although raising funding from a High Street Bank is difficult Pegasus Funding Resources have many more finance sources in our tool bag! As specialists we can access finance from Business Angels and VCs, Invoice Finance, Asset Finance, Trade Finance, Credit/Debit Card Future Sales Finance, Turnaround Finance, Non High Street Banks and many other sources. So please get in touch if you or your clients need funds.
Alan Cottle Pegasus Funding Resources Stonehouse Station Road Holt Trowbridge Wiltshire BA14 6RD | ||||||||||
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Pegasus Funding Resources is a Member of the National Association of Commercial Finance Brokers | ||||||||||
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