One third of UK SMEs are considering a change of business funding provider in 2014, citing a lack of flexibility and poor customer service among the top reasons for moving, according to research carried out by independent invoice finance provider, Bibby Financial Services.
The survey revealed that business owners expect similar levels of service as non-business customers, with more demand for facilities such as 24-hour online access.
The research, carried out among 1,000 small and medium-sized enterprises, also shows that one–in-five believe their current arrangement is inflexible, with 42% suggesting the service they receive from their existing provider is average or poor.
David Postings, chief executive officer at Bibby Financial Services, said: “Our research shows that a significant proportion of UK businesses are considering the use of other forms of finance to their existing arrangement and it seems that many are not completely satisfied with their current provider, which is likely to be a driver for change.
“SMEs today expect much more when it comes to flexibility in relation to the amount they can borrow, contract length and online access to finance.”
More than a third of businesses surveyed said a cheaper deal would encourage them to consider a new arrangement, 17% cited a shorter term agreement as desirable, and 15% of SMEs said they would like to try a providers’ services before committing.
Postings added: “In terms of finance, businesses are becoming more like consumers and they want to try out different types of funding before taking them on.
“Increasing funding available to SMEs is critical to building solid foundations for sustainable economic growth, but it’s evident that funders need to become more flexible in their approach if they are to meet the growing demands of the marketplace.”
In relation to switching finance providers, there were a number of reasons SMEs showed caution including setting-up costs, uncertainty of customer service and a lack of information about other forms of finance available.
Postings said: “Businesses are widening their scope when it comes to considering different forms of finance but it seems that they still don’t have all of the information they need.
“In order to help them find the most suitable source of funding for their individual business model, the finance sector needs to provide more flexibility so they can make informed decisions.”
