Open All Hours: 24/7 SMEs Growing Businesses While Banks Sleep

More than two in five British small businesses (42%) are applying for growth funding outside office hours when banks and retail lenders are closed – and almost one in ten (8%) are night owls applying for finance after 9pm during the working week

At a time when traditional lenders have been pressured by The Government and trade bodies to liberalise their lending polices to the country’s small business community, the new data raises a fundamentally new issue – most retail lenders are not open for business when a large proportion of small businesses choose to address their funding requirements.

Funding Xchange, which has recently partnered with KPMG to tackle the nation’s £4 billion funding gap that small businesses face, is the first UK online marketplace that connects small businesses with a broad range of lenders to ensure more small businesses secure funding, on better terms and that lenders compete to get their custom.

The new data, based on a representative sample of more than more than 1,000 SME loan applications, uncovered the time of day during the working week when small businesses chose to devote time to applying for finance to support the growth of their ventures.

  • Early birds. More than one in 10 SMEs (11%) submitted a funding application before or at 9am, ensuring the day ahead was clear to deal with customers.
  • Office hours: 35% of applications were made between 9am and 1pm and a further 24% between 1pm and 5pm.
  • Watershed lending: More than one in five (22%) turned attention to funding applications between 5-9pm.

  • Night owls: A further 8% actioned lending requirements between 9pm and midnight. 

Katrin Herrling founder of Funding Xchange commented: “I set up Funding Xchange having run a small business myself, clear that the finance industry was not awake to the real needs of small businesses. Aside from how satisfactory loan approval levels are - or are not - corporate lenders often don’t understand that running a small business is not a nine-to-five office job. The country is fortunate to have a rich tradition of innovation and enterprise from its small business community, which is the backbone to the economy. A home truth is to recognise how hard these small business leaders work to grow ventures that will be our country’s success stories and wealth creators of tomorrow. Our data tells us that start-up owners are most likely to apply for funding very early or late in the day because they need to spend the traditional working day looking after customers. This is when lenders need to be open for business.”

“Funding Xchange is not just about helping more SMEs secure lending deals on the right terms – we typically save SMEs an average of £2,000 per loan by ensuring they get the best possible deal – it’s also about really being there when small businesses need help. The CMA is currently leading a review on opening up the small business lending market. The ability for the finance community to be there when businesses need them is perhaps the new elephant in the room. Based on our data, by the end of the year we expect around half of all loan applications will be outside the normal working day. This is a gap we will help close. We will provide a platform to help banks better accommodate their customers’ funding needs and we will bring more funding choices to the market, giving SMEs what they really need – tailored solutions, when they need them most and on their terms.”