Small businesses told finance available

Alternative sources of finance other than banks are available to small businesses, it has been claimed.

Research by PayPoint has found that half of British workers are frustrated entrepreneurs, with the lack of funding one of the main reasons for not setting up a small business.

Kathleen Hall, a writer for SmallBusiness.co.uk, expanded on the issue and suggested some solutions.

She said: “Right now by far the biggest problem facing entrepreneurs is access to finance. Although the banks are claiming it is business as usual, because the terms of lending are so onerous for many SMEs, traditional bank lending simply isn’t an option.

“If you are a start-up looking for a loan, the chances of obtaining one without having to put your house on the line is slim to none. However, there are alternative routes such as credit unions or Community Development Finance Institutions.”

A survey by the Institute of Directors recently found that, in the first half of 2010, 33 per cent of finance applications were declined by banks.

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