As per a survey by ICAEW, fewer than two in ten small to medium-sized businesses have applied for bank loans during the past year. The demand for the business loans is weak by the small and medium-sized enterprises.
As per ICAEW, many of the companies were seeking out alternative sources of finance by reducing working capital and by cutting costs.
Out of the 1,000 companies which were polled by the Institute of Chartered Accountants in England and Wales (ICAEW), only 16 percent of them expressed that they had applied for credit in the past 12 months. About 1 in 2 small and medium sized enterprises which applied for loans expressed that they had noticed an increase in borrowing costs and arrangement fees. About 30 percent of them expressed that they were pressured by their bank to change of the size or cost of their facilities. And also even the existing borrowing arrangements are resistant to the growing cost of borrowing.
Tags: Small business