Research company data showed that many struggling businesses are still looking to the banks to provide growth capital and restore confidence.
However, 43% said the terms and conditions were considered too harsh, particularly surrounding additional security requirements, and 37% said they were delaying investment until the economy improved.
In addition, 31% cite a lack of rewards for risk taking as the reason for reluctance to approach banks.
When asked where they would turn to for advice on alternative finance, 69% of respondents said their accountant, 37% cited their bank manager, 24% a consultant or other financial expert and 20% other business owners. A total of 10% said they would not seek advice and just 8% would turn to a trade association.
Where gaps in the provision of financial advice exist, 43% believe the government should step in. In general, those who felt that the government should provide support for business owners wanted this information in the form of self-help guides.
The minority felt that certain financial advice – on high street lending and improving cash flow – should be available through the banks, arguing that this may make them more likely to lend to businesses clearly following this advice.
Alex Jackman, Forum’s senior policy adviser said: “While some firms are seeing improvements to cash flow, working capital and growth capital many more are seeing these deteriorate and are looking to the banks to provide the finance for growth in order to boost business confidence and drive economic recovery.
“Small business owners are likely to feel vindicated that the banks are taken to task given the experiences they have had in recent years – but clearly mainstream lenders remain centrally important in their eyes.”
