News

September 28, 2012

Access to funding for SMEs could create 500,000 UK jobs

Small British firms have the potential to create more than half a million jobs if they could get more cash from banks, a new study reveals.

The research identifies up to 1.5 million small firms — dubbed "caged tigers" — that want to hire staff but are unable to because of banks' refusal to lend.

These are some of the findings of the first quarterly Funding for Growth study conducted by Funding Circle, the marketplace where people lend money to businesses.

The study of 500 small businesses shows that small firms are poised for growth but are constrained by a lack of finance. A third of those surveyed (33%) would increase staff numbers if they could obtain finance, while 31% would seek to grow their business more generally.

Businesses that would increase staff numbers would do so by an average of 12%. That could unlock more than 500,000 new jobs and drive down unemployment to pre-recession levels.

James Meekings, co-founder of Funding Circle said: "With the right support, these frustrated businesses could be the future drivers of our economy, with the ripples of job creation being felt throughout UK industry. Not only would the economy feel the direct impact of a boost in employment, but a quarter would also use finance to increase stock, supporting businesses throughout their supply chain. Instead, they risk becoming a lost generation of 'caged tigers' stifled by a lack of business finance."