Objective 3

Improve SME understanding
of finance options

When we make better information available
to smaller businesses, we help them make better choices about finance. Being more aware of and having more confidence in
their options means they are more likely
to seek funding.

Objective 3

Improve SME understanding
of finance options

When we make better information available
to smaller businesses, we help them make better choices about finance. Being more aware of and having more confidence in
their options means they are more likely
to seek funding.

We raise levels of awareness and understanding among smaller businesses of the finance options and providers available so that they are able to make better informed decisions. This helps stimulate the demand side of finance markets.

​Researching our markets​

We work with a range of partners to gather better information about the market. Our flagship publication is our annual Small Business Finance Markets report. In 2017/18, it showed that finance markets broadly continued to supply smaller businesses with the majority of the finance they seek but that certain key gaps remain. The report highlighted particular gaps in financing for scaleups, uneven access to finance across regions and a need to raise awareness of finance options further, so that smaller businesses get the finance that best meets their needs.

Centre of SME finance expertise

During 2017/18, we published five research reports:

  • Equity Tracker – an in-depth assessment of equity markets for smaller businesses using a wide range of data sources
  • Benefits of diverse finance markets
  • UK Business Angels Market Report (joint publication with UKBAA and IFF Research)
  • Internationalisation of SMEs (joint publication with KfW, BPI, ICO and CDP)
  • Small Business Finance Markets Report (includes the Bank’s Business Finance Survey results).

We use our annual business finance survey to measure whether small businesses are aware of the various finance options, looking at the average awareness among smaller businesses of six products – leasing, VC, business angels, peer-to-peer lending, crowdfunding and mezzanine finance. This was 50% in our November 2017 survey.

We also monitor whether smaller businesses are confident that they know where to obtain information on the types of finance and specific providers available. 66% of smaller businesses surveyed responded yes, improving slightly from 65% in the previous year. Another key metric is the proportion of smaller businesses that contacted only one provider the last time they sought finance, which reduced from 69% to 58%.

Our survey on SME Business Finance complements other data sources such as the SME Finance Monitor, to give a richer understanding of small business experience in accessing finance.

We inform and contribute to the wider debate by presenting regularly at conferences and seminars, enabling finance providers, smaller businesses and the research community to be more informed about UK finance markets relevant to them.

Providing information to drive demand for finance

Currently, we raise awareness of finance options for businesses primarily through the publication of the Business Finance Guide, published jointly with the Institute of Chartered Accountants in England and Wales (ICAEW) Corporate Finance Faculty with contributions from a further 21 partner organisations. The guide is also available online. In 2017/18, the guide was accessed online or distributed in hardcopy nearly 85,000 times.

Building on the success of the Business Finance Guide, we recently launched a new interactive website – FinanceYourGrowth.co.uk – that offers independent information on finance options for scale up, high growth and potential high growth businesses.

In August 2017, we ran a social media campaign to encourage businesses to explore all their finance options, #RejectRejection. We ran this in conjunction with a host of partners and which averaged over 4,000 daily impressions over the course of a month.

Improving finance markets

To help overcome information asymmetries and improve smaller businesses’ awareness of the availability of alternative finance options, we are continuing to advise HM Treasury on the designation of Credit Reference Agencies (CRAs) to share SME credit data for the benefit of a wide range of banks and lenders.

We also provide ongoing support to the government for their Designated Referrals Scheme. Small businesses turned down for an eligible lending facility by one of nine participating banks must be offered a referral to the designated online finance platforms. If the business agrees, its details are passed on to the platform by the end of the next working day. This referral system has been live since November 2016 and many small businesses have already benefited from the new process.

Case study

KisanHub

Founded in 2012, KisanHub’s platforms are used by some of the world’s largest farming businesses and agrichemical companies.

Its Crop Intelligence Platform connects businesses with their crops to deliver insights throughout the agricultural season, helping to provide food security across the world.

British Business Bank Enterprise Capital Fund partners IQ Capital and Notion Capital were part of KisanHub’s £1.7m fund-raise, enabling them to scale up the company, accelerate the development of their flagship products, and execute faster on the existing market opportunity.

The funding enabled their move into larger premises and increase their headcount to more than 30 people.

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Case study

At a glance

85,000

nearly 85,000 Business Finance Guides viewed online or distributed

50%

SME awareness of a given range of finance products

Information Hub launched on 4 June 2018, enabling businesses to better understand their
finance options

78,000+

people reached through British Business Bank attendance at events

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