Trust your accountant!!

Small businesses are twice as likely to trust financial advice from their accountant as their bank manager and are resorting to out-dated sources in their desperation for increased funding, according to research carried out by Hitachi Capital.

A survey of 1,000 UK SMEs revealed that only 21% would seriously consider the advice of their bank manager, compared to 43% who said they would trust the wisdom of their accountant.

The study also found evidence of an endemic problem with cashflow as 43% admitted to having had or still experiencing difficulties in the past year, and John Atkinson, head of commercial business at Hitachi Capital says ‘it’s hard to hear that one fifth of those couldn’t get help from their banks’.

He said:

‘We are in a very different business environment at the moment, not only are economic times tough, but our faith in the banks is at an all time low. This has created a difficult situation for businesses as companies don’t know where to turn.’

Atkinson described it as ‘scary’ that nearly half of the SMEs polled were sourcing finance from secured loans (20%), bank overdrafts (17%) or credit cards (12%). And while these are more expensive and complicated than other sources, 28% confirmed that friends, family, life savings and selling off of assets were used to increase finance and cashflow for their business.