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The Hunt for Fresh Capital

The way forward for British borrowers in 2019

In 2018 the banking industry was mired in uncertainty, and businesses are only now feeling the consequences. Banks promised to be by your side, but our survey suggests they are now locking their vaults to one in five businesses that need a loan.

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Anecdotally we hear that banks have postponed all decisions on new sub-£10m loans until after 29 March 2019. And back in October 2018, Parliament’s powerful Treasury Select Committee castigated banks for their “scandalous” treatment of small businesses, highlighting the case of RBS’ Global Restructuring Group, which purposefully pushed firms to the brink of collapse in the hope of picking up their assets on the cheap.

Enter 2019, and with a no-deal Brexit looking ever more likely — British enterprise fights on. Business is forging ahead in spite of the uncertain economic and political outlook, with 2017/18 corporation tax receipts jumping by more than 10% on the previous year, one of the biggest rises in the last two decades.

To understand the 2019 reality for businesses, ArchOver commissioned in-depth research into the state of business lending in the UK in 2018. What we found is cause for alarm. While around four in five businesses had their applications for financing approved – in line with the industry’s own figures – only 13% of them received the full loan amount. That pushed far too many into the arms of unscrupulous finance like invoice discounting, aware they were putting their feet into a bear trap but unsure where else to turn.