Nearly half (47 per cent) 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.
One in six (16 per cent) of these suggested their business is now in a worse position as a result.
This is according to research by Amicus Commercial Finance, a lender of flexible working capital to SMEs.
The survey shows more than half (52 per cent) of SME owners ignored advice they received from their mainstream bank over the last 12 months.
The research found 40 per cent of SME owners do not rate the level of service they receive from their mainstream bank as good. SME owners in the West Midlands (53 per cent) and North West (53 per cent) were the most disappointed in the level of service while half (50 per cent) of SME owners in the IT and communications industry didn’t rate the service as good.
Of those who have used the bank to help them support their business with working capital or overdraft facilities, nearly a third (30 per cent) would not describe the bank as helpful and nearly half (46 per cent) suggested they would not describe them as flexible.
Regionally, two in three (65 per cent) SME owners in the West Midlands suggested that they wouldn’t describe their mainstream bank as helpful with working capital or overdraft facility support. Eastern (57 per cent) and South Western (57 per cent) SME owners said they wouldn’t describe the bank’s advice as helpful. More than three in five (63 per cent) of business owners in Yorkshire wouldn’t describe the help from their mainstream bank as flexible, compared to 57 per cent in the West Midlands and 53 per cent in Wales.
The research also looked at the lack of human interaction available for SME owners when looking for working capital or overdraft facility support. The three most commonly associated grievances of dealing with a bank through a call centre are that they are time consuming (22 per cent), frustrating (17 per cent) and complicated (10 per cent). Amicus Commercial Finance provides a revolving working capital facility based on a proprietary invoice discounting platform which uses the latest available technology and data extraction methodology.
John Wilde, managing director of Amicus Commercial Finance, says: “The research shows a worrying trend of business advice from mainstream banks been 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 high-touch personal service and cutting edge technology to make the process as straightforward and efficient as possible for SMEs.”
