Are you a Permanent Non-Borrower?… you’re not alone…

A third wouldn’t borrow money – even if they were paid to ?

 Owner Managed Businesses (SMEs) are becoming increasingly self sufficient and shunning all forms of borrowing…

31% are now classified as Permanent Non-Borrowers (PNBs)… the highest level to date and up from 20% in Q1 of 2012…
That’s a problem for the Bankers et al who finance SMEs because roughly a third of SMEs have had no ‘borrowing event’ in the last 5 years, and don’t plan to have one in the future either…

And it’s a problem for Westminster too… keen to squeeze finance into SMEs to ramp up growth into the next election cycle.

But it’s also a problem for guys like me… bred on the Anglo raw meat ‘debt is good’ diet…
So what’s going on? Why won’t an increasing number of you borrow?
Well it’s not really the economy that’s putting SMEs off…
Those citing the Economy as a barrier to their business are down to 16% from 33% in Q1 2012
And it’s not the availability of debt…
Those citing Access to Finance as a barrier are down to 9% from 15%

And it’s not that they don’t expect to grow…

In fact 68% of SMEs with 10 to 49 employees do (up from 56% in Q1 2012)…

and 57% of those employing 1 to 9 people (v 51%)

So… is it :
profits are up and being retained thus reducing the need for external funding?
the bunker mentality of the recession years is proving hard to shake off?
the numerous finance scandals (global & local) have shaken already shakey trust?
the pace of expected growth is too slow to warrant any major funding change?
traditional funding processes are too demanding, too slow, too painful?
as businesses recover is there less need for non-growth / emergency related funding?
are you avoiding anachronistic Personal Guarantees?
or are you all too busy playing the property / buy-to-let boom & would rather borrow privately for that than borrow to invest in your trading companies?
I don’t know…
I do know that there is a lack of awareness out there about all the weird & wonderful new forms of finance popping up…
Take an alternative funding source that is now going mainstream… peer to peer crowd funding (Funding Circle, Rebuilding Society)… only 17% had heard of it… yet given the flexibility, speed & all round user-friendliness of these funders I can’ t help but think that if that number were higher… the number of Permanent Non-Borrowers may well be lower.
Data sourced from SME Monitor