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Posted 25th March 2024

New Data Shows One in Six SMEs Rejected for Business Loans

New research by fintech lender Nucleus Commercial Finance has uncovered some of the key concerns currently faced by the UK’s small businesses, and cash flow and funding are at the top of the list.

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new data shows one in six smes rejected for business loans.


New Data Shows One in Six SMEs Rejected for Business Loans
small business loan application on the desk.

New Research from Nucleus Commercial Finance Reveals the Financing Concerns of UK Businesses

  • 47% of small British businesses say they need to invest in finance and accounting functions
  • One in five SMEs lack the data structure required to secure a loan
  • 15% of UK businesses have recently been rejected for a loan

New research by fintech lender Nucleus Commercial Finance has uncovered some of the key concerns currently faced by the UK’s small businesses, and cash flow and funding are at the top of the list. 

A survey that took in the views of more than 1500 small British businesses showed that although one in five (21%) of SMEs plan to apply for a business loan within the next six months, 18% lack the data structure required to secure a loan. This would partly account for the fact that 15% of the small businesses surveyed have recently been rejected for a loan. 

Some of the other reasons businesses acknowledged as preventing them from raising money from lenders include:

  • A lack of understanding of the available funding options (32%)
  • A lack of assets to secure funding against (28%)
  • Unfavourable credit (20%)
  • Lenders were unwilling to appreciate the complexity of the business’ offering (20%)
  • Limited time available to complete lengthy loan applications from traditional lenders (19%)

In fact, the problem is so significant that 47% of businesses say they need to invest in finance and accounting functions.

In addition to these in-house concerns, 37% of businesses said they have seen less government support for their business in recent months, causing further concerns and difficulties. 

Chirag Shah, founder and CEO of Nucleus Commercial Finance comments: ‘The economic climate has been extremely turbulent during the last few years, leaving many UK businesses struggling. And this inability to access funding is increasing the strain for many. 

‘Last year, 345,000 businesses across the UK shut their doors for the last time. And the current financing infrastructure is at least partly to blame. If we can’t make flexible funding available to the small businesses that need it – when and how they need it – we’re going to see more and more businesses failing. 

‘That’s why Nucleus Commercial Finance is working to provide an alternative approach to business finance. Offering flexible loans with terms that suit small businesses means we’re doing our bit as a lender to enable security and growth for a stronger future economy.’

Categories: Finance, News


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