SMEs look away from lenders

Britain's recovery is under threat as small- and medium-sized businesses are not borrowing money to grow, according to a new survey of 300 company owners and directors.

Bibby Financial Services found that 65 per cent of firms had not applied for external forms of finance in the past 12 months. This was up 10 per cent on the first quarter of 2010. Only one in 11 firms had applied for a bank loan in the past year, while 16 per cent relied on personal savings or money from family and friends. In a separate survey, Bibby recently found that 4.8 million SMEs are paying a combined £263m more on fuel than they were a year ago.