A report by the Institute of Directors (IoD) says that one third of UK businesses that have asked for new borrowings with their bank this year have been declined.  This is a poor reflection on the current availability of money that will power the UK out of recession. But the story is worse than it appears as the figure is probably over 50%.

The IoD survey is based on lending to Limited Companies. Many companies excluded from this survey are the Sole Trader and Partnership businesses that are even less likely to get lending as they tend to be the smaller companies. Additionally the survey is based upon ‘formal’ rejection by the lender. Most businesses would informally approach their bank before going through the lengthy paperwork process. Could the figures then be nearer two thirds being rejected ?

The market for lending to small businesses via Leasing is starting to grow. New lenders have entered the fray and companies such as Hardsoft who specialise in Computer Leasing have seen a 25% increase in business this year. Hardsoft can reassuringly quote approvals for lending running at over 90% acceptances.  For new start up companies the figure is 70%. Often computer leasing companies will also require less security than the traditional bank lenders . The rates charged for leasing are now generally much cheaper than bank interest rates and admin fees are minor.


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