Tuesday 11st Jul 2017
- 50% increase in SMEs wanting specialist sector knowledge since 2015
- 31% want to see a greater commitment to their sector
- Shopping list of demands to banks spelled out by SMEs
A recent poll commissioned by Hitachi Capital Business Finance has revealed that four in every five (83%) SMEs in the farming sector say there are ways in which banks could better support them with their growth aspirations.
At a time when there is a question mark over agricultural aid as the exit negotiations with the EU get underway, this latest research sheds light on the SMEs’ relationship with their banks and how this may help them grow as a business.
The top concern cited by SMEs was banks not having specialist knowledge of the agriculture sector. Tracking opinions from over 1,000 SMEs from 15 different sectors over the past 18 months, a trend emerged suggesting that this was an issue for a steadily growing proportion of SMEs in the agriculture sector – rising from 26% in 2015, to 39% in 2017.
Alarmingly, 31% of agricultural small businesses wanted to see banks committing to the sector more generally – another issue that has seen a big leap in the proportion of SMEs that would like this addressed.
Transparent fees were also high up the list of ways banks could better support agriculture businesses, as well as being an issue that has concerned an increasing number of SMEs. While calls have increased for banks to have specific sector knowledge, there has been a drop in the number of SMEs complaining that banks are unwilling to lend. While this remains an issue for one in five agriculture businesses (21%), there has been a gradual decline from 29% 8 months previously.
Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance comments: “These results highlight the fact that businesses in the agriculture sector can, at times, feel like a square peg in a round hole when it comes to financial services. If their specific needs are not being met and if the pressures they are under and challenges they face are not properly understood, the situation will become increasingly frustrating for them. With the threat of economic uncertainty ahead, SMEs need partners who speak their language to ensure their businesses continue to grow. At Hitachi Capital, we work with a range of customers in the agriculture sector helping to find them tailored solutions so they can buy the equipment they need.”
Ways banks could better support SMEs in the agriculture sector:
|
|
Q4 2015 |
Q2 2016 |
Q4 2016 |
Q2 2017 |
+/- since 2015 |
|
Having specialist sector knowledge |
26% |
26% |
31% |
39% |
13% |
|
A genuine feeling of partnership/ long-term commitment |
35% |
31% |
36% |
32% |
-3% |
|
A commitment to the sector the business is in |
18% |
26% |
21% |
31% |
13% |
|
More transparent fees and charges |
19% |
24% |
27% |
26% |
7% |
|
Flexible finance terms that can be tailored to suit my business |
36% |
22% |
16% |
26% |
-10% |
|
More competitive lending rates |
22% |
31% |
18% |
24% |
2% |
|
Highlighting a full range of funding options for my business (e.g. beyond basic loans) |
|
|
|
22% |
|
|
Greater willingness to lend |
29% |
23% |
25% |
21% |
-8% |
|
Expertise and advice about how Brexit may/ may not impact my business |
|
|
|
16% |
|
|
Greater willingness to refer me to a broker if/ when my business requires specialist expertise |
|
|
|
4% |
|
|
Expertise to help my business break into international markets |
|
|
|
4% |
|
|
None of these |
14% |
9% |
15% |
6% |
|
|
Don't know |
18% |
21% |
19% |
11% |
|
The research was conducted by YouGov among a nat.rep. sample of 1153 small and medium business owners and directors. Fieldwork was undertaken between 2nd - 16th May 2017, 3rd - 11th October 2016, 4th - 13th April 2016, and 5th - 15th October 2015. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).