British Business Bank Finance Intermediaries Survey

Ipsos’s new survey for the British Business Bank of finance intermediaries, including accountants, lawyers and small business finance advisors, working with smaller businesses in the UK, has been published. The research explores respondents’ views on Covid-19 recovery, the supply and demand of finance, the types of finance available and the financial ecosystem in their region.

A summary of our main findings can be found below.

Current landscape

Demand for finance was thought to be strong among SMEs at all development stages and across the UK, largely as a result of the Covid-19 pandemic. But despite high demand, most respondents felt this was not matched by the available supply of finance, with risk-aversion among banks cited as a key barrier to supply. Respondents also felt SMEs lacked awareness of the range of finance options available, with SMEs tending to focus on debt finance options and more traditional lenders.

Evolving financial landscape

Respondents felt that SMEs’ demand for finance would remain high over the next 12 to 18 months, and there was optimism about the supply of finance increasing – although a relatively large proportion expected the supply of debt finance to decrease, seen to be driven primarily by the big banks. Four in ten (41%) also said that SMEs had taken on too much debt due to the Covid-19 pandemic, and seven in ten (69%) thought SMEs were not well-equipped to reduce their debt burden over the next 12 to 18 months, reflecting challenges of their Covid-19 recovery.

Enhancing the ecosystem

Respondents’ views were mixed on the adequacy of the finance ecosystem to support SMEs at the various development stages within their region or nation. Lack of awareness among SMEs of the resources available was a concern among respondents, and SMEs’ awareness of specific finance options and providers was thought to be low, particularly for equity and alternative finance.

ESG and net zero

Respondents were split on the importance of ESG (Environmental, Social, Governance) and net zero for SMEs. They suggested businesses had limited knowledge and understanding of these, as well as limited awareness and access to specific finance to realise their ESG and/or net zero goals.

Methodology

On behalf of the British Business Bank, Ipsos conducted a survey of SME finance intermediaries, broadly defined as those who serve and support SMEs in their finance needs (e.g. accountant, banks, legal professionals). The research involved an online survey of 511 intermediaries, and 36 follow-up one-on-one qualitative interviews with survey respondents, across the UK. The research took place between 23rd February and 30th March 2021.