Small businesses struggling as overdrafts are shut down at a rate of £5m per day

26 October 2015

Growth opportunities for a large number of UK SMEs are being affected by the reduction and removal of business overdrafts by mainstream lenders. Around 17% of small and medium enterprise businesses are reporting that their overdrafts have been axed completely – with 30% seeing reductions in the last two years.

This research, conducted by Funding Options, has revealed a major collapse in what was previously a go-to solution for businesses in need of finance. Henceforth, as banks seek to ease the risk element on their balance sheets, the subsequent fallout for businesses is vast – with many unaware of where to turn next.

On this, our Chief Executive, Conrad Ford said, “A big reduction in the level of working capital available is not just a one-off blow for a small business but presents ongoing problems until replacement funding is found or built up.”With various alternative lenders appearing to plug the gap, all is not lost however. £76bn worth of non-bank finance is being accessed, which means alternative lending on the whole represents 46% of the worth of traditional loans and overdrafts – a figure we’ve never seen before. To read the full coverage in the Telegraph, click here.