Responding to the publication of the SME Finance Monitor for Q4 2017, Stephen Pegge, Director of Commercial Finance, UK Finance, said:

?This research suggests there has been a recent uptick in demand for finance amongst SMEs, while banks continue to approve around eight in 10 applications from smaller firms.

?It is encouraging that increasing numbers of small firms are looking to use finance to grow their business in the year ahead.

?However, most SMEs are still self-funding, with the vast majority not seeking any new external finance in the past year.

?Just one in 20 SMEs see access to finance as a major obstacle, far behind issues such as red tape, the current economic climate and political uncertainty.

?It appears that most small business owners are carefully considering their options before seeking external finance, with larger SMEs more likely to borrow to help expand their business.?

Notes to Editor

1. The quarterly SME Finance Monitor is produced by independent insight agency BDRC for the member banks of the Business Finance Taskforce and is produced independently under the governance of a steering group. It is the largest and most frequent study of its kind in the UK. Research findings have been gathered across 27 waves of interviews since 2011 and are based on more than 130,000 interviews with SMEs.
2. Key findings of SME Finance Monitor for Q4 2017 include:
   • Eight in 10 of all loan and overdraft applications made by SMEs in the 18 months to Q4 2017 were successful, in line with other recent periods.
   • The proportion of SMEs planning to apply for finance increased during 2017 from 10 per cent in Q1 to 14 per cent in Q4.
   • Legislation and regulation? (15 per cent), ?political uncertainty? (15 per cent) and the ?current economic climate? (14 per cent) were named as the top three barriers faced by SMEs. Access to finance was perceived as a major barrier by just five per cent of SMEs.
   • There were some early indications of increased demand for external finance. In Q4 2017, seven per cent of SMEs reported making an application for new or renewed finance, up from four per cent in Q1-3 of 2017.
   • 83 per cent of SMEs were ?happy non-seekers? of external finance, in line with 2016, with many showing a preference for being self-reliant.