Accountancy firm Azets says many small businesses continue to face prohibitive borrowing costs and slow decision-making from lenders, despite the UK Government’s SME plan to boost access to finance.
A range of measures, including the expansion of the Growth Guarantee Scheme, were announced by the government.
However, firms are being frustrated by their inability to unlock the new funding.
Greig McKnight, regional managing director in Scotland for Azets, said: “With interest rates still well above pre-pandemic levels, SMEs are finding that the capital they need to invest in growth remains expensive and slow to secure, particularly for those without extensive trading history. “
The government’s “Backing Your Business” strategy aims to strengthen SME access to finance, committing £25.6bn through the British Business Bank and supporting 69,000 Start-Up loans.
Rising running costs and growing regulatory burdens were also blamed by Scotland’s small businesses for threatening their expansion plans.
New research by the Federation of Small Businesses (FSB) reveals that more than half (56%) of respondents plan to grow in the next two years.
Rising business costs (cited by 52%) and the impact of the cost of living crisis remain the biggest obstacles to their growth plans.
Lack of access to finance is a growing and significant challenge, cited by nearly a third (31%).
Guy Hinks, FSB Scotland chair, said: “It is vital that all levels of government keep tightly focused on the needs of small businesses, and the pressures facing them, when they are developing new policies.”
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