Banks are providing little to no support for SMEs in financial difficulty or struggling to stay afloat.
New research by the Centre for SME Development at the Ulster Business School (UBS) and the Federation of Small Businesses (FSB) found that the majority of small firms could not rely on their bank for help if the business failed or they tried to reopen following a failure.
The study, authored by Dr Aodheen McCartan and professors Mark Durkin and Pauric McGowan, found that 61.5 per cent of the SMEs polled indicated an intention to switch banking provider in the past 36 months.
However, only nine per cent of respondents had actually switched their bank in the past three years, showing that although SMEs are frustrated, they feel there are limited alternatives.
Relationship-managed customers were slightly more likely to think about switching banks, and their concern focused more on whether they felt they were getting a good deal in regard to bank charges.
The research shows that many SMEs think the level of support they are offered by their bank has levelled out or worsened in the past three years, while many felt that even if they got on well with members of banking staff, the bank would be little support in a time of need.
According to the Belfast Telegraph, the FSB shared the findings with Northern Irish finance minister Sammy Wilson.
“By looking at businesses that pre-date the recession, as well as newer ones, it lets us gain real understanding of the actual situation and the perceptions of small businesses,” he said.
Despite concerns about support from the banks, different FSB research found that small business optimism has increased in the past year.
The organisation’s first quarter Voice of Small Business Index found that sentiment has increased from -5.6 in the last quarter of 2012, to 6.3 in 2013 Q1.
However, perhaps indicative of the poor financial support they are receiving, the number of small businesses planning to expand has shrunk to 54 per cent from 56 per cent in Q1 2012.