SMEs still finding it tough to get funding

Published on Sunday 15 November 2009 21:14

THE £200 billion injected into the financial system by the Bank of England to boost lending has not filtered through to the UK's small and medium-sized businesses, according to a survey published today.

The British Chambers of Commerce (BCC) said 33 per cent of companies reported that accessing finance had been more difficult over the past three months, a deterioration on the 20 per cent reported in June.

A further 64 per cent of respondents to the BCC's monthly business survey reported no change in finance availability, while just 3 per cent said the situation had improved.

As well as battling continued lending constraints, the 400 businesses questioned were also gloomy about general trading conditions.

Meanwhile, figures from Nottingham University's Centre for Management Buyout Research (CMBOR) revealed that the total value of private equity buyouts in Scotland has halved.

In the first nine months of the year, the total value of buyouts stood at 776.1 million, down 51 per cent on the 1.6bn recorded in same period last year. Some 18 deals have taken place so far this year, against 27 last year.

The CMBOR said the secondary buyouts of business support services firms Vikings Moorings, at about 170m, and Wood Mackenzie, at 553m, have helped sustain the market.

John Walker, director at Barclays Private Equity, which sponsored the study, said:

"Taking into account the severe shortage of lower mid-market activity, a sustainable recovery appears to be some way off. Fewer deals in the lower mid-market bracket reflects the tightening of bank debt and vendors' reluctance to sell until profitability becomes more predictable."