SMEs 'struggling to access finance', says ACCA

11 Sep 2023

A report published by the Association of Chartered Certified Accountants (ACCA) has suggested that small and medium-sized enterprises (SMEs) are struggling to access finance and working capital.

The ACCA's data showed that small firms are struggling to access finance for a range of reasons, including rising interest rates. 57% of firms reported that borrowing in order to manage cashflow has proven more difficult over the last quarter when compared to the previous 12 months.

47% stated that supplier credit is now harder to access, and an additional 27% said that accessing support from HMRC's Time to Pay initiative is harder.

Small firms also found late payment to be a 'persistent problem' in the UK, creating barriers for cashflow throughout supply chains and leading to adverse consequences for some businesses.

Late payments by large businesses have the most detrimental impact on small firms, the research revealed: late payments from large firms generate a 'domino effect' throughout supply chains.

Commenting on the matter, Glenn Collins, Head of Technical and Strategic Engagement at the ACCA, said: 'More effort is needed in encouraging banks to reach out to the SME community and to provide more suitable financial products.

'Equity finance offers an alternative route to raising funds. And government needs joined up thinking to make sure it is not accidentally restricting the flow of finance to this crucial sector.'