New research shows that small businesses, recruiters and umbrella companies in the north have less chance of obtaining business loans than their counterparts in the south.
Three times as many small business managing directors in the north are worried about obtaining investment and only 14% of northern SMEs think their bank understands their business and its objectives whereas almost a third of small businesses in the south say their relationship with their bank is satisfying.
Small business owners are currently waiting anxiously to see who will be most affected by the government’s spending review.
The MD of the Leoni Sceti Group, the company that commissioned the research, said the results show how small firms were affected by the recession and highlights the ever growing North-South divide.
Business Smiths support service agreed that many enterprises are having no luck when they approach their banks for funding and it does not expect that situation to change in the near future. Simon Ellingworth, a director at the company has gone as far as urging entrepreneurs to look for alternative means of funding.
Earlier this month the Bank of England announced that businesses are not benefitting from the historically low base rate as the high street banks are charging individual borrowers a much higher mark-up than the BoE standard policy rate.
It looks like SMEs will be struggling for some time to come and for those in the North these are very worrying times. The Leoni Sceti Group research also determined that small businesses in the north are twice as likely to be in debt compared to their southern counterparts. Are we therefore going to see a large increase in business bankruptcies?
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