Scottish Government figures suggest rise in number of firms successfully accessing financing
New figures from the Scottish Government suggest more small and medium sized businesses are successfully securing funding.
The Scottish Government’s SME Access to Finance report for 2012 shows 87 per cent of firms surveyed were able to access a hundred per cent of the money applied for.
Latest figures compare with 79 per cent from the 2009 and 2010 survey data.
When looking over the last year, just nine per cent of firms were seeking new funding, and 32 per cent were looking to renew existing facilities.
The percentage of outright rejections for funding from banks has also fallen against the previous year's figures, at 17 per cent for 2012 against 24 per cent in 2010.
However, the survey of more than 1,000 Scottish SMEs found 11 per cent of firms surveyed secured none of the financing they sought compared with eight per cent in 2010 and 15 per cent in 2009.
Loans were rejected at a much higher rate than other forms of financing, with the outright rejection rate for secured loans at 40 per cent, down five per cent on figures produced for 2010.
Overdrafts have remained the most common form of finance applied for in the last three years, with 29 per cent of all firms applying for this facility, followed by credit cards at 17 per cent, leasing/HP at 17 per cent and loans at 12 per cent.
The outright rejection rate for unsecured loans was 25 per cent, up three per cent on 2010 survey figures.
Of those applicant firms applying for new lending over the past year, 74 per cent said they successfully obtained all the finance required with 17 per cent of firms saying they had not managed to secure any of it.
Sectors with the highest rejection rate include manufacturing and construction, which both saw a rise in the rejection rates on 2010 figures.
The 2012 survey shows an overall deterioration in refinancing/renewing compared with 2010 survey figures whilst there was a slight improvement in new lending.
Around 37 per cent of firms who reported a change to their finance agreements when renewing a credit facility, highlighted an increase in costs, either in fees or interest rates.
There was also an increase in the proportion of firms reporting an increased time taken for decision.
Lloyds Banking Group and Royal Bank of Scotland continue to dominate the SME market in Scotland, accounting for 70 per cent of the total market share, down from 77 per cent market share in 2010.
Finance Secretary John Swinney said SMEs “are the lifeblood” of the Scottish economy, employing more than a million people and accounting for 54 per cent of total employees in Scotland's private sector.
“Any evidence of increased lending to SMEs is good news for our economy and will be a key element in building a sustained recovery,” he said.
He added: “Lending criteria are stricter now than in the past but these figures show that accessing finance is possible with the right proposition.
“Businesses must present a robust, commercially sound proposition.
“Companies can come to our agencies or Business Gateway for advice and information before they even approach the banks and I would urge them to make use of all of the services available.
“The Scottish Government will continue to do what we can to provide the environment to unlock new private investment.
“We have set up the Scottish Investment Bank which is open for business and investing in innovative, growth companies.”