The BCC has called for action to improve the availability of finance for SMEs as accessibility, awareness and a lack of competition continue to hold firms back.
In written evidence submitted to the Treasury Select Committee, the BCC said many smaller firms are no longer seeking finance as they consider it too limited and costly.
The committee has launched an inquiry into the challenges faced by small and medium sized firms (fewer than 250 employees) when seeking finance.
Using feedback from the thousands of businesses within its unique network of 53 chambers across the UK, the BCC told MPs:
Jonny Haseldine, Policy Manager at the BCC, said:
“Research has highlighted that in 2022 almost half of smaller firms (48%) did not borrow any funds. But among those that are currently using finance, half are using more than pre-pandemic and becoming more concerned about their ability to pay.
“This is an especially acute issue after many firms were forced to take on much higher debt burdens during the pandemic in order to survive.
“The continuing tough economic conditions also mean many SMEs have a huge amount on their plates and don’t have the time or expertise to find the finance options that work for them.
“More needs to be done to help firms find the right solutions. We also need to see the British Business Bank given more resources, greater support for social enterprise lenders, and improved flexibility in funding criteria.
“The system desperately needs to change. With investment in the UK economy continuing to toil in the doldrums, we must widen the pool of financial options available to firms to kick-start the growth we need.”