October 15 2013.

Despite the level of public and political attention focused on the shortage of finance for smaller firms, less than one in five (17%) of SMEs has attempted to raise finance in the past 12 months with 40% of applications rejected, according to the Albion Ventures Growth Report 2013.

The report examines 450 SMEs with a combined turnover of over £1.6bn and reveals a clear divide between stagnant businesses that are borrowing to survive and those that are seeking finance in order to expand in the future.

Of those who have attempted to raise capital in the past 12 months, more than one in four (28%) were looking for long term development capital, while under a third (32%) wanted working finance to keep their business going. The largest demand for working finance was from sole traders, accounting for 62% of applications. The research shows that companies with a larger turnover had fewer problems finding access to finance.

The report found that nearly all pessimists applied for a bank loan or overdraft while optimists applied for a number of  different finance options, including equity, mezzanine and invoice discounting.

To see the full report CLICK HERE.