Thursday, September 22, 2011 12:35:00 PM
Three quarters of SME's think that bank lending margins on loans are too high, research from Syscap has revealed. 89% of businesses consider the arrangement fees on loans to be too high, up 8% on last year.
Steep loan arrangement fees make it uneconomical to borrow and in combination with high lending margins, the result is that SME's are increasingly looking to non-traditional finance providers. The reasearch also showed an increased demand for finance from SME's, with 42% of businesses reporting that their requirement for finance has increased over the last three months, up from 27% during the same period last year.
Syscap explained "the banks' explanation for their low lending figures is that businesses are not sufficiently confident in their growth plans to need finance. These results suggest that the reality of the situation is that businesses do want finance, but they are put off loans by high margins and excessive arrangement fees."