Saxo Payments Banking Circle recently commissioned a study of small and medium-sized businesses in the online space, to uncover the pain points they have experienced in getting access to funding. In particular, the research sought to identify where limitations of traditional bank-based business lending are impacting enterprise success, and how fresh players in the market are stepping up and joining forces to support and empower businesses.

A white paper – The Epic Business Loan Battle – SMEs fighting for finance – reveals the findings of the research study, exposing the reality of obstacles small and medium businesses face in obtaining finance from traditional lenders, and how pioneering innovative solutions are already beginning to change the entire business lending landscape.

Respondents to the research represented a cross-section of the UK SME market. Over 500 individuals from across the spectrum of SME size and turnover were involved, giving a clear picture of the realities faced every day by young and growing firms. 92.5% confirmed that they have had cause to access business finance within the past five years. Of these, more than half (52%) needed to access finance to purchase necessary equipment for the business. 35% needed cash to help them buy inventory and 28% needed help with the cost of expanding into new markets.

For many respondents, high fees and interest rates are a major concern. A lack of access to funds could have serious and even life-changing implications. For 25%, it would mean having to let employees go. 30% would have to reduce prices to encourage sales and increase cash flow, and 39% would be unable to buy the equipment the business needs.

To succeed in the new digital era, financial institutions – banks and FinTechs alike – need to focus on customer relationships. However, legacy systems and regulation are slowing them down, meaning they do not have the ability to provide flexible, affordable business loans. New FinTech entrants are able to offer merchants a cheaper, faster alternative to the banks.

This is where the Financial Utility can step in, providing FinTechs with the capability to offer their merchant customers a transparent, flexible, low-cost, and easy-to-manage loan solution. Businesses are changing, and so are their banking needs. Financial institutions must keep up or risk defeat.

Businesses need a new generation of innovative, affordable, forward-thinking lenders, able to move quickly without legacy systems holding them back.