SMEs are becoming more aware of specific lending products but provider awareness is lagging behind, according to a report from the British Business Bank (BBB).
Awareness of different forms of finance among smaller businesses has continued to increase in 2016, with small increases in reported awareness across the majority of finance types, said the BBB.
“While awareness of different finance products shows continued progress, awareness of specific providers within each finance type has not increased significantly,” wrote the BBB.
“As a result, the gap between awareness of the existence of finance types and awareness of specific providers (i.e. who to contact) is increasing.”
Of 1,535 SMEs the bank surveyed, around 85% were aware of leasing or hire purchase.
But only just over half (55%) could identity a leasing or asset finance provider.
In terms of comparison to other types of finance, the results proved more positive for leasing, with P2P and trade finance scoring much lower in both product awareness and provider awareness.
“This gap suggests that smaller businesses are absorbing information regarding finance products more readily than on finance providers,” said the BBB.
“This relative lack of knowledge of specific providers may be caused by the small proportion of this group that are actively considering using these various finance options at any given time. Given the evidence on usage of different types of finance, it follows that the gap between awareness of finance types and providers is much lower for debt products than equity finance.”
Simon Goldie, head of asset finance at the Finance & Leasing Association (FLA), said: “We agree with the BBB that still more needs to be done to promote awareness among SMEs of specific finance providers and we have suggested that the BBB should run an impartial and comprehensive online directory of funders, giving SMEs easier access to the full range of finance options available to them.”