Construction SMEs tend to consider wider variety of financing options, BBI survey suggests
Published: 22 October, 2015
Businesses in construction are likely to consider a diverse range of options when seeking finance or information to expand their business, including turning to friends and family, Business Banking Insight (BBI) has found.
32% of businesses in the sector would consider approaching acquaintances and relations for business investment, and 49% of businesses would turn to their friends and family for guidance on finance, an ICM poll of 5,000 small and medium-sized enterprises (SMEs) across the UK, including more than 300 across construction, found.
In addition, 21% of companies would consider peer-to-peer lending if they wanted to expand their business, compared with a national average of 23%.
The BBI examines how well the UK's small and medium-sized businesses are being served by banks and posts its findings on its website, www.businessbankinginsight.co.uk.
Construction businesses were found to be more open when it comes to considering using different sources of guidance when financing their companies; 32% would use a mentor, 67% would turn to their bank and 39% would seek out financial advice websites. This compares to national averages of 37% consulting a mentor, 70% their bank and 41% looking at financial advice websites.
Economic Secretary to the Treasury Harriett Baldwin said: “Britain’s small businesses are the backbone of our economy, which is why a key part of our long term plan is making sure they can access the finance they need to grow, create jobs and succeed.
“Data collected as part of the Business Banking Insight survey shows that our plan is working, and that our smallest businesses are increasingly considering alternative finance providers.”
John Longworth, director general of the British Chambers of Commerce and spokesperson for the BBI, said: “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.”
Mike Cherry, Federation of Small Businesses policy director and spokesperson for the BBI, said:“The BBI can help companies of all sizes get the right finance. Accessing the best product for your business is critical to growth and future investment. The BBI should be part of that journey to allow you to see what other businesses like yours have found useful and which providers might be right for your needs.”