More than a third of small and medium-sized businesses in Yorkshire have never changed their finance provider, it has emerged.
Reasons cited for not changing financial provider include not having time to review their financial strategy and being unsure of their options.
The findings come from the Close Brothers Business Barometer, a quarterly survey that canvasses the opinion of SME owners and senior management across the UK.
Lee Hayes, regional sales director for Close Brothers Invoice Finance in Yorkshire, said: “It’s worrying that so many SMEs don’t appear to be regularly appraising their business finance, which is arguably a little complacent.
“Cash flow is the life blood of any healthy business and so it stands to reason that financial strategy should be reviewed regularly throughout the life cycle of the business to ensure that the funding in place still meets current business requirements.
“Without taking the time to properly assess their situation and understand the full range of financial options available to them, SME owners and managers could miss out on opportunities for growth as the funding they have in place may not be fit for purpose.”
Of those local SMEs that have switched providers in the last 10 years, over a quarter have moved from a high street bank to an alternative lender. And of that number, 38% say they changed because alternative lenders offer greater flexibility, while a quarter believe alternative sources of finance are less expensive than traditional lending.
Said Mr Hayes: “Invoice finance is one such type of alternative finance and according to recent findings by the Asset Based Finance Association (ABFA), its use amongst businesses is at an all-time high.
“However, our research shows that there continues to be a lack of awareness amongst small and medium-sized businesses in the region, with a quarter of those we talked to admitting they don’t understand how invoice finance works.”