Commenting on the announcement by Lloyds Bank who have pledged £1 billion in lending for SMEs, Iain Moffatt, UK Head of Regions at KPMG said : “The announcement by Lloyds is yet another positive sign that the economy is getting back on its feet and that growth is the order of the day. However, a recent poll of UK SMEs by KPMG found that the many mid market businesses are not willing to take on any risk associated with external finance and leverage their business. This is an indication that companies remain risk averse and still uncertain about a banking market which some view as being unsupportive to the SME sector during the recession.
“This fund could be a lifeline to those very small businesses who have previously been viewed as more risky in general terms than larger businesses, and continue to struggle following half a decade of economic stagnation where access to funding was all but extinct. Despite positive economic signs, many SMEs are not entirely convinced that the economy is out of the woods yet with two-thirds claiming that ultimately the economic conditions would be the biggest impediment to their growth. If the economy doesn’t do as well as predicted or interest rates increase too early, the risk of potential insolvency could be heightened for many businesses who intend to fund growth via new debt so it is important that any small business looking to borrow money would be able to accommodate bumps in the road as the economy repairs itself.”
The results of KPMG’s poll of 165 UK SMEs can be found here : http://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/NewsReleases/Pages/Cautious-SMEs-shun-external-funding-in-the-pursuit-of-growth.aspx
Emma Murray, PR Manager, KPMG 020 7694 6506 email@example.com
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.