Changes to the main body of Welsh business finance could mean that many Welsh SMEs are worse off. Almost 95% of the companies in Wales employs fewer than nine people, showing they play a huge role in local economies but certain changes have reduced focus on small companies – could this mean that not enough is being done to solve the issues that they face?
Indeed, the Federation of Small Businesses (FSB) is amongst those keen to see an improvement on current circumstances for Welsh SMEs. Finance Wales, which was originally set up to fund small businesses, can now also invest in larger ones as well – this is what has sparked the concern from many experts. However, ministers are confident that this will not affect the funds that small businesses receive, it just means that Finance Wales will no longer be restricted in the companies it can invest in.
Many small businesses in Wales are in fact finding it harder to get access to the funds they need. Whereas in the past they may have received funding if they approached the bank with a good business plan, nowadays many are being turned away. Welsh businesses are particularly hard hit it seems – according to the latest FSB figures, proportionally more Welsh companies are applying for loans than any other part of the UK, with more and more finding that financing is unobtainable or unaffordable.
One of the best ways to counter this is to look for alternative finance options, such as invoice factoring. If your business operates on an invoicing system for clients then you could be eligible – just because the banks aren’t lending doesn’t mean that your business needs to go without funding.