The research is carried out annually across the devolved nations, and this year’s report found that smaller businesses in Scotland are most likely to say they struggle to access finance among the UK’s devolved nations.
The report found that 42% of respondents faced barriers to securing finance, around twice the rate in Wales (21%) and Northern Ireland (21%). This was also up on the 38% recorded in Scotland the previous year.
Firms in Tayside, Central Scotland and Fife were most likely to report barriers in access to finance, at 52% of respondents from the regions, while only 28% of smaller businesses in the South of Scotland said they faced obstacles.
The ability to obtain or repay finance was the most common barrier reported, with 51% of those reporting barriers in access to finance. Lack of awareness or availability of support was second, at 17%, while the complexity and time required for applications followed with 16%.
However, despite an uncertain macroeconomic backdrop, 41% of the Scottish businesses surveyed predicted they expected to grow over the next 12 months (26% in Wales and 61% in Northern Ireland). To help fund that, the same percentage anticipate needing additional finance – up slightly on 39% last year.
Barry McCulloch, Senior Manager, UK Network, Scotland at the British Business Bank, said: “Overall, our Scotland SME Access to Finance Report reflects our previous research that shows Scotland’s smaller businesses, and the financial ecosystem that supports them, are in reasonable shape and levels of optimism are broadly as high as 12 months prior. There is healthy appetite for finance – which can drive growth and innovation – and, in the majority of cases, firms are confident of meeting the external finance needs and current debt levels are manageable.
“One concern, however, is the perceived barriers to accessing finance particularly around the lack of ability to secure and repay any support. There are a range of funding options available – including through our Investment Fund for Scotland and other programmes – and we would encourage more smaller businesses with ambitious plans to explore the opportunities.”
Business Gateway National Unit's Chief Officer, Hugh Lightbody, added: "At Business Gateway, we recognise the vital role that the SMEs we work with play in driving the economy. By partnering with the British Business Bank on its annual finance survey, we will help ensure that the voices of all businesses are heard. These insights will shape future financial support and funding options, making it easier for businesses to access the resources they need to grow and succeed."
You can read the full report here.