36% of UK SMEs cite “expansion and growth” as their main reason for seeking funding

Fundbird, an online platform that matches SMEs with the right funding, has today released data detailing the profile of small businesses in the UK seeking finance. It is encouraging to see that 36% of businesses using the site to find funding, are doing so to fuel expansion and growth. Despite the recent surge in negative headlines highlighting the impact of late payments, just 21% are looking for funding to improve cash flow. 15% are looking to purchase inventory and assets, with 11% are seeking working capital. Just 4% of businesses using Fundbird are doing so to refinance debts.

Although the top two reasons for seeking funding remain generally consistent across industries, the amount of funding sought varies significantly by sector. Fundbird data shows that the smallest finance requests come from business owners in the e-commerce sector, who tend to seek funding of £10,001 – £25,000, with the need to purchase inventory in their top two motivators. Small retailers seek an average of £25,001 – £50,000, with the largest requests of between £50,000 and £150,000 originating from the Leisure and Hospitality and Business Services sectors.

Sector Average request Top reason for seeking funding Second reason for seeking funding
E-commerce

 

£10,001 – £25,000 Expansion and growth – 25%

 

Purchasing inventory – 10%

 

Retail

 

£25,001 – £50,000 Expansion and growth – 31%

 

Improve cash flow – 28.5%
Leisure & Hospitality

 

£50,001 – £150,000 Expansion and growth – 30%

 

Improve cash flow – 18%

 

Business Services £50,001 – £150,000 Expansion and growth – 38%

 

Improve cash flow – 34%

The demographic user data shows that 80% of the businesses seeking finance through Fundbird are located in key cities, such as London, Birmingham, Edinburgh, Leeds and Manchester. The SME owners utilising Fundbird to find out about all the funding options available to them are mostly men (65%), which is reflective of the fact that there are many more men than women running small businesses in the UK. According to a report by the Department of Business, Innovation & Skills only 18% of SMEs are female-only led.

Sharon Argov, CEO and Co-Founder of Fundbird says: “It’s encouraging to see that Britain’s businesses are looking for funding from alternative lenders for positive reasons, both in London and beyond. Our data suggests that British SMEs are optimistic about their future despite repetitive headlines around cash flow, invoicing and late payments. With so much appetite for finance to boost and fulfil growth ambitions, it’s vital that businesses make a careful assessment of the type of funding that is best suited to their business needs and circumstances.”

For more information visit: www.fundbird.co.uk

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