Ease In Supply Of Finance To Small Businesses

21st June 2012

New figures show that more small and medium sized businesses in Scotland are successfully applying for finance with an increased proportion of those seeking new lending securing all of the money they applied for.

The Scottish Government's SME Access to Finance report for 2012 shows that 87 per cent of firms were able to access a hundred per cent of the money that they were seeking. This is up on the comparable figure of 79 per cent from the 2009 and 2010 survey data. When looking over the last year, 9 per cent of firms were seeking new lending, with 32 per cent looking to renew existing facilities.

The key results from the Scottish Government survey also point to a decrease in the number of companies that were rejected outright by banks. However, the proportion of firms who secured none of the finance sought also increased marginally.

Meanwhile, the 2012 survey finds that demand for finance has remained broadly stable since the 2010 survey with 45 per cent of firms looking for credit over a three year period to 2012 compared to a finding of 43 per cent in the three years to 2010.

Finance Secretary John Swinney marked the publication of the survey by visiting Skoogmusic in Edinburgh. Skoogmusic is a young, growth company which has created an innovative musical instrument especially for teaching special needs children and adults

The company has attracted a great deal of interest from the education sector in the UK and has a 10 per cent overseas turnover. Mr Swinney spoke to the Directors about their experiences of securing finance.

Finance Secretary John Swinney said:

"Small and medium seized business are the lifeblood of the Scottish economy. Collectively they employ over one million people and account for around 54 per cent of total employees in Scotland's private sector.

"Any evidence of increased lending to SMEs is good news for our economy and will be a key element in building a sustained recovery.

"The Scottish Government continues to work to encourage viable businesses to pursue the funding they require to grow and support jobs. Lending criteria are stricter now than in the past but these figures show that accessing finance is possible with the right proposition. Businesses must present a robust, commercially sound proposition. Companies can come to our agencies or Business Gateway for advice and information before they even approach the banks and I would urge them to make use of all of the services available.

"The Scottish Government will continue to do what we can to provide the environment to unlock new private investment. We have set up the Scottish Investment Bank which is open for business and investing in innovative, growth companies.

"We also remain committed to maintaining the most supportive tax environment anywhere in the UK, retaining the small business bonus scheme which has either eliminated or substantially reduced business rates for two out of every five commercial properties in Scotland."