Is The Lack Of Finance Stunting Economic Growth

As the result of increasing redundancies and job insecurity, many people are considering forming their own company. Indeed our company formation figures confirm that from last year the number of people forming a company is actually up. However, from the feedback we have received, many are experiencing difficulty in raising finance to fund their company’s progression and growth.
Historically, Michelle Marsden, founder of residential care company ‘ Marsden’s’, has developed a new site every year for the last eight years, but she says ,the current lack of finance available has stunted her growth plans for the next couple of years. “
She comments: ‘Expansion has always been our strategy; however, now we have adopted a survival strategy. This is not due to lack revenue, but down to the fact that the bank simply won’t lend us anymore capital.”
Thomas Wood, director of consultancy firm Wood Consultancy, concurs commenting that throughout the last year only one of his numerous clients has been able to secure finance in the last year and a half.”
He adds; “SME’s with sound credit and consolidated assess have been rejected for funding from a number of banks, that a couple of years ago would have been biting their hands off. It is my opinion that the finance is being given to larger SME’s who are perceived as low risk.”