London, United Kingdom (PressExposure) March 02, 2012 -- Perhaps all of the blame should not be placed on the banks though, as it is abundantly clear that people starting businesses are simply not turning to them for their borrowing requirements any more. There are five different lenders who form the strongest core of Project Marlin - Lloyds, HSBC, RBS, Santander and Barclays - and they all claim that they have adapted their lending processes in light of the government agreement in order to make borrowing from them easier. The problem is though that people simply aren't approaching them for the money.
The figures from the FSB certainly confirm that less and less people are using ban loans to start their business, or to maintain it through tougher times. This doesn't mean that banks are refusing to lend though - to ascertain this we would have to look at the individual bank's lending records - but that people are simply scared to be dragged into the world of borrowing. This is probably motivated by the fact that many small business have failed over the years, leading to debt. By funding the business themselves, they know that they will not be subject to lenders who could withdraw support or ask for repayment early.
Finance Alternatives to Make Up for Low Capital
Despite not borrowing from banks, new business owners might not have huge amounts of spare cash, meaning that they have to find other ways to raise finance or provide equipment for their business to succeed. Luckily there are many other alternatives to borrowing from banks and other large institutions, meaning that the process becomes a lot easier.
Perhaps the most popular type of alternative to taking out loans is to engage an asset-based borrowing service; a service that provides invoice factoring or discounting. This will means that companies both new and old will not have to wait for ages for their invoices to be paid - instead, the asset-borrowing company will advance them the money, which is paid back when the invoices are finally settled. This invoice factoring is obviously extremely helpful when a business needs a quick injection of capital, perhaps so that they can take on extra staff, or maybe replace vital equipment.