SME research highlights banking inefficiencies

SME research highlights banking inefficiencies

Nearly half (47%) of small and medium-sized business (SME) owners claim the business advice they received in the last year from their mainstream bank had a negative impact on their business operations, and 16% of these suggested their business is now in a worse position as a result.

This is according to new research by Amicus Commercial Finance, which also highlighted that 52% of SME owners ignored advice they received from their mainstream bank over the last 12 months.

The research showed that 40% of SME owners do not rate the level of service they receive from their mainstream bank as ‘good’. SME owners in the West Midlands and North West were the most disappointed in the level of service while half of SME owners in the IT and communications industry didn’t rate the service as ‘good’.

The study from Amicus showed that of those who have used the bank to help them support their business with working capital or overdraft facilities, 30% wouldn’t describe the bank as ‘helpful’ and 46% of SME owners suggested they wouldn’t describe them as ‘flexible’.

Regionally, 65% of SME owners in the West Midlands suggested that they wouldn’t describe their mainstream bank as ‘helpful’ with working capital or overdraft facility support. 57% of Eastern and South Western SME owners said they wouldn’t describe the bank’s advice as ‘helpful’. Whilst 63% of business owners in Yorkshire wouldn’t describe the help from their mainstream bank as ‘flexible’.

The research also looked at the lack of human interaction available for SME owners when looking for working capital or overdraft facility support. Indeed, the three most commonly associated grievances of dealing with a bank through a call centre are that they are time consuming, frustrating and complicated. Amicus is offering an alternative by providing a revolving working capital facility based on a proprietary invoice discounting platform, which utilises the latest available technology and data extraction methodology.

The firm’s proposition has proved to be very attractive to a broad range of businesses with a turnover between £1m and £20m. Its ‘Intelligent Cashflow’ solution is claimed to be user friendly, making it straightforward for firms to access working capital. It integrates seamlessly with a business’s accounting system, reconciling sales in real time, updating availability of funds and providing quick and easy access to additional cashflow.

John Wilde, Managing Director, commented: “The research shows a worrying trend of business advice from mainstream banks being rejected or taken on board with negative consequences for SMEs. There is a growing divide between the level of business service and the flexibility required by business owners and the advice being offered by mainstream banks. As working capital and cashflow are by their very nature dynamic, most traditional mainstream systems have failed to keep pace over the last few years.

“At Amicus Commercial Finance we have taken a fresh, tech-driven approach that builds on some of the lessons learned in the fast growing alternative finance sector. Our goal has been to combine deep sector experience with a personal service and technology to make the process as straightforward and efficient as possible for SMEs.”

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