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01 March 2017

Working with the British Business Bank to improve finance markets for smaller UK businesses

business partners meeting

FSB have partnered with The British Business Bank and the Institute of Chartered Accountants in England and Wales (ICAEW) to create the Business Finance Guide. The guide will provide smaller businesses and their advisors with a complete overview of their finance options.

FSB members will know how difficult it can be to secure finance. In fact whilst many small businesses are ready and keen to grow they face a mountain of challenges. Barriers like an unwillingness among the big lenders to take on ‘young’ companies with a higher risk profile; limitations on early stage equity funding; and smaller businesses being unaware of alternative lending competitors can stop small firms from accessing much needed finance.  

A lack of awareness of the options out there can often be the biggest challenge for smaller businesses. Whilst our survey results show that progress has been made, with 48% of SMEs having an awareness of six alternative finance options, there is always more than can be done.

So why is this a problem?

The big four banks dominate the smaller business finance market in the UK – in Scotland it’s even more concentrated as we only have two main players. British Business Bank research shows that over half of UK smaller businesses don’t shop around for finance instead opting to go with their current account provider.  

For some small businesses this won’t be a problem, but, for others, bank finance may not be what their business needs. The same research finds that around half of those businesses rejected for a bank loan will stop looking for finance. This means the loss of potential expansion and job creation opportunities with the adverse knock-on effects for Scottish economic growth.

A growing number of finance options have become more mainstream and accessible to smaller businesses over the years, such as crowdfunding. Building further awareness, understanding and confidence in those options amongst small businesses is a key part of achieving growth across Scotland. 

What is the FSB doing about it?

 There is a clear need to help our member businesses across the country prosper and grow, which is why FSB has partnered with the British Business Bank to make the Business Finance Guide freely available to members. Uniquely, the guide has been endorsed by all the main bodies representing banks, equity finance, asset finance, alternative lending and businesses themselves.

The Business Finance Guide online version will help you navigate your finance options, impartially setting out the choices available – whether you are a start-up, small business or a growing mid-sized company – and providing expert videos so you can find out more. You can access the guide at: If you would like hard copies, please email


Colin Borland is FSB's Head of Devolved Nations


Lobbying & Campaigning from FSB

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