Research has revealed that 48% of SME manufacturers have said that they donât apply for finance due to the confusion that is caused by the language that is used by providers. Out of a poll that has been carried out by LDF, SMEs in the manufacturing industry is more likely to be refused finance.
It has been suggested that Financial organisations are stunting the growth of the manufacturing sector in the UK because there is an artificial âfinancial language barrierâ. It has been estimated the 48% of small producers are prevented from accessing financial support due to this language barrier. Out f all the different UK businesses that were included in the study, manufacturers have the worst experience of accessing financial support. The national average for businesses that are refused finance is 46%, but the manufacturing sector has a refusal rate of 62%.
The confidence of the UK manufacturing industry is at its lowest levels since 2009. The post Brexit growth that has been seen by the industry is caused by the weakness of the pound. LDF have found that despite the opportunities post-Brexit, access to financial help is still considered a minefield for small businesses.
LDF is the largest independent finance provider to small businesses in the UK and has carried out research which has shown that the term CAPEX was not understood by 33% of SMEs in the manufacturing industry. CAPEX stands for Capital expenditure, and are the funds that are used by a company in order to acquire or upgrade physical assets such as property, industrial buildings or equipment. Therefore, it could be considered a term that would be used very often in the financial industry. It is a disadvantage then to not know this terminology. Overall the manufacturing industry has been put at a disadvantage by financial providers that refuse to help.