Business: Mind The £4.3 Billion Funding Gap!


A funding gap of £4.3 billion is holding back small and medium-sized businesses (SMEs) and preventing economic growth, according to new research released today by Money&Co., the cutting edge person-to-business (P2B) crowdfunding business. The findings show the severe challenges SMEs face when trying to access finance.

The study, conducted by research agency Populus on behalf of Money&Co., asked senior management at UK SMEs about their last loan application, comparing it to the average sum awarded. The discrepancy reveals a funding gap of £4.3 billion for the UK’s 404,175 SMEs.

For small firms with 10-49 employees, the average funding gap amounted to £11,752 per business. The average medium-sized business (50-249 employees) experienced an average funding gap of £69,961. And that, as The Sun points out, is no fun.

Of the 301 small and medium-sized businesses polled across the UK, close to two thirds (64%) agreed that the traditional banking system is broken, with more than half (51%) in agreement that bank bureaucracy acts as a deterrent when applying for a loan.

Despite the lack of SME confidence in UK banks, the research revealed that 72% would still approach one first for a business loan. Only 4% would consider crowdfunding as an initial means to secure finance, while 5% would first approach an angel investor. 11% of those polled would consider using a Government Enterprise Fund.

Money&Co. CEO, Nicola Horlick, was quoted in the Telegraph as saying: “This research clearly shows that the banks are not providing UK SMEs with the finance they need. Although recent figures indicate that the UK economy is recovering, we cannot ignore a funding gap of such magnitude. The £4.3 billion funding gap isn’t just acting as a barrier to UK SME growth, it could potentially stifle the recovery.”

“Crowdfunding can help address the banking shortfall. The sector is experiencing a surge in interest and demand as businesses start to recognise a real alternative route to finance exists. Crowdfunding provides a great opportunity to both credit-worthy businesses and investors, offering them something they aren’t getting elsewhere: easily accessible finance and good interest rates.”


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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.