ACCA calls for lenders to boost access to finance for SMEs

SMEs need better support from lenders, ACCA has found – or the finance landscape could shift considerably.

Small and medium-sized enterprises (SME) play an important role in the economy, and they’re gaining more confidence as the economy recovers. But if they are to grow, they need access to sufficient finance to support their ambitions.

According to a new report from the Association of Chartered Certified Accountants (ACCA), there is still a lot to do before traditional finance providers can give SMEs the support they really need.

In fact, it shows that business financing around the world is actually easier than it has been at any point since the global financial crisis – so it’s puzzling that small firms are still finding it harder to access finance than bigger companies.

The study finds that much of the business finance available can still only be obtained where there is little or no risk to the lender or investor. Riskier ventures frequently need to put up large amounts of collateral, which they cannot always produce.

But ACCA points out that actually, neither of these options really offers total security – and the biggest losers are SMEs. As intellectual property takes over as the primary asset of many firms, this situation could get worse unless finance providers reassess their approaches.

What’s more, the findings indicate that women are under-represented in the world of business finance. That was particularly true in areas where finance was being raised on the behalf of clients.

“This is a substantial misallocation of human resources at the global level, and if it’s happening in the finance profession, where technical expertise tends help combat gender stereotypes, it’s probably even more widespread in the wider business world,” said Manos Schizas, ACCA senior economic adviser.

Perhaps it is unsurprising that ACCA believes accountants will play an increasingly important role in helping SMEs access finance. Because they have access to detailed financial information they can play an important role in sealing the deal between firms and the new wave of innovative lenders. Crucially, they also have the skills and insight to act as effective strategic partners, giving SMEs some of the intangible support they need to grow.