IS LACK OF FUNDING FOR BUSINESSES HOLDING BACK THE GROWTH OF THE SERVICE SECTOR?
PREMIUM CREDIT ENCOURAGES SERVICE COMPANIES TO OFFER CLIENTS ALTERNATIVE WAY OF FUNDING FEES AS NEW DATA* REVEALS LACK OF SME CONFIDENCE TO GET NEW FINANCE
Epsom, May 2014 – Leading premium and fee funding business, Premium Credit, is responding to new research that suggests that small businesses aren’t particularly confident about getting access to new funding. The quarterly BDRC SME Monitor reports that over half of those applying for new funds in 2013 were unsuccessful. And smaller, younger SMEs and those applying for credit for the first time were less likely than other applicants to be successful. The BDRC report also said that success rates for first time applicants in 2013 were lower than in previous years, with 60% of first time applicants ending the process with no facility (up from 51% in 2012).
Roger Brown, Head of New Markets at Premium Credit believes the difficulties in getting access to new credit, especially for newer businesses, is seriously hampering the growth of the service sector which plays such an important part in the UK economy. “Service-led businesses, such as accountants and IT support companies, rely heavily on their clients being able to meet annual fees to underpin their staff and technology overheads. Clearly it’s less preferable to receive fees by monthly instalments, but working with Premium Credit can lead to a win win - the business gets paid upfront and the client gets to pay by instalments.”
The BDRC SME Monitor also reports that confidence is relatively low amongst SME’s that future applications for credit will be successful, with nearly 60% thinking that their bank would not agree to a future request. Premium Credit believes this should be a serious cause for concern amongst service-led businesses.
“Businesses that are giving clients more choice about how they pay fees are winning over those who stick, dogmatically to payment upfront for annual fees”, continued Roger Brown. “And it doesn’t have to be at the detriment of the service provider’s own finances.
“At Premium Credit we provide a source of funding for businesses that charge annual fees that is making a real difference to commercial success. From paying for accountancy or property management fees to IT support services, Premium Credit can provide a cost-effective solution. The credit application process is clear and uncomplicated and, crucially, the service company still gets their fee upfront in full.”
Premium Credit provides the finance to pay fees for a number of different professional services in regular instalments, rather than in one lump sum, giving small businesses vital help in managing cashflow and giving the service providers certainty of payments.