Small firms urged to seek alternative credit options

Date: 19th July 2010

Small businesses starting out in the UK can access credit from other sources than banks, it has been suggested.

Kathleen Hall, a writer for SmallBusiness.co.uk, said while they may be limited, there are alternative routes to finance.

The comments follow the publication of a report by the Institute of Directors, which revealed that 39 per cent of firms applied for bank finance in the first six months of the year and one-third of those had their applications declined.

Ms Hall commented: "If you are a start-up looking for a loan, the chances of obtaining one without having to put your house on the line is slim to none.

"However, there are alternative routes such as credit unions or Community Development Finance Institutions."

The expert also said that the tough economic conditions mean now could be an ideal time to start a firm and pointed to successes like Microsoft, Burger King and the Jim Henson Company as examples of firms that had been created during "tough trading conditions".

Posted by Thomas Fletcher