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December 27, 2016

Why Many SME Owners Are Unhappy with Their Banks

A common problem that small and medium enterprises are currently facing is the lack of access to necessary funds. Yes, the biggest challenge being denied for loans that will enable their business to grow and continue to prosper.

The main reasons SME’s are being denied financial help are:
  • Their cash flow is not deemed strong enough
  • Financial institutions are not lending to small and medium enterprises
  • Lack of capital and aggressive business plans

Cash flow is always the main concern for any business owner

This concern is very much a double edged sword for SME’s owners everywhere; the reality especially for those who are looking to expand their business is a cycle of that many feel leads to the chasing of one’s own tail. They have nurtured their company and made it grow which is an achievement to be proud of. They are now ready to take the next step in expansion only to find that their cash flow is not considered strong enough to qualify for a loan so they can begin make changes that will in fact increase their money making ability.

Institutions Not Lending to Small and Medium Enterprises

Keeping in mind that banks are in the business of making money explains the reasoning behind this unfortunate situation.

The bottom line is that SME’s generally are not considered for a loan for the following reasons:
  • The inability to supply up to date financial information
  • Unable to provide proof of a sustainable cash flow
  • Does not clearly specify the purpose of the business
  • Lack of collateral
  • Banks do not like to take risks
When considering their reasons from a strictly business perspective this can be accepted as smart business. Add into the equation the small and medium enterprises lack of capital and aggressive business plan an extremely objective person can see the reason behind the refusal of loans. One must also consider the impact of decisions on the economy as a whole. It’s not hard to imagine SME owners being unable to thrive in such a climate.

Logbook Loans Available to Small and Medium Enterprises

Logbook Loans currently offer short-term loans to businesses. If you have a vehicle that is utilized for business purposes only you can receive a loan the same day that you apply for it. These loans are perfect to get you out of a financial situation that was both unexpected, and not something that you believe is in danger of occurring again. This should be used as a one-time solution, not a long-term educated business decision. Visit logbookcalculator.com today to get more information and find out how it works.

SME owners are facing difficult financial issues, unfortunately there does not seem to be an end in sight. Financial planning is the key in your success. Logbook Loans understands the difficulties you are facing and is available to offer quick cash to your short-term needs. Contact us today to see how we can help you today.

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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