Where can London business owners go for trusted advice?

The big banks have traditionally dominated business finance. For many small companies, they’ve always been the first port of call when extra funding is needed. And, while a recent influx of new challengers has no doubt got them looking a little worriedly over their shoulder, new research by Growth Street shows that they still have the number one spot.

Our survey, which polled 2,006 businesses across the UK, revealed that 51% of SME owners would approach a bank first when thinking about finance for their business. This figure increases to 55% when looking only at the 462 respondents based in the capital.

We can’t help but feel that speaking to your bank first for advice on how to fund your business could seriously limit the likelihood of you getting a good deal. Can you really trust a bank to have your best interests in mind?

Not to mention, many may find that there’s simply not the expertise on the high-street that there used to be. A recent report revealed that less than one in five SMEs thinks their high-street bank understands their business challenges.

But, if not your bank, then what other options are there? Well, you could speak to your accountant. They’ll already know about your company’s financial situation, so could provide a useful perspective on the types of finance that might be most suited to your business.

Alternatively, you could use a finance broker. Their wide scope of the market might save you hours of time spent on research. They may also have access to deals that you won’t have been able to find yourself.

Despite this, though, the popularity of these options is still pretty low. Just 10% of businesses we surveyed said they would approach an accountant in the first instance, with 9% saying they’d use a broker. In fact, compared to our survey last year, the likelihood of a business approaching the bank first actually went up by 5%.

Greg Carter, CEO of Growth Street, said:

“As banks’ footprint on the high-street continues to shrink, I think many small business owners will find themselves approaching a broker or accountant for advice on what funding options are available to them.

“This should be a welcome change – more businesses receiving independent and expert guidance can only be a good thing. Hopefully this will result in SMEs finding solutions better tailored to their business challenges, and a better deal, too.”

Of course, there’s no one-size-fits-all solution to receiving advice on funding. In some cases, it might be a matter of working with a number of parties to find the best way to solve your business challenges. For example, seeking guidance from a business consultant or mentor to define strategy; working closely with your accountant to gauge what type of product might be most suitable based on your financial position to achieve that strategy; then employing the help of a broker to find you the best deal.

Either way, if your business is looking to find finance, taking a bank-centric view of the market is likely to be a sure-fire fire way to limit what’s available to you. So, next time your business needs finance, what’s going to be your first port of call?

Growth Street Limited is registered in England & Wales (company number 09264172).

Our registered address is 5 Young Street London Greater London W8 5EH United Kingdom.

Written on in Accounting Business Insights Borrowing