The most worrying statistic taken from the research is that more than half of London businesses started in the last 18 months cited difficulties in accessing external finance, showing that start-ups are not receiving adequate information or advice on this subject.
The research also shows a significant proportion of businesses using costly means of finance, such as overdrafts and credit cards, utilised by a third of small businesses, despite cheaper financing options, such as grants, loans and factoring being available.
“Many small businesses find raising finance a complex issue, but finding the right form of finance need not be an arduous task, provided businesses seek out someone who can help guide them through the process,” said Judith Rutherford, chief executive of Business Link for London.
However, the silver lining on this cloud is that almost a third of London businesses increased their capital investment last year, while more than half maintained the previous year’s levels. This compares with less than a tenth of respondents reducing their capital investment and suggests that the capital’s small businesses are becoming more confident after recent economic trials and tribulations.
