Access to capital, growth and productivity are intrinsically linked. The IMF has estimated that a lack of funding could be responsible for as much as a 0.4 per cent decline in UK productivity. In downturns and beyond, SMEs can often be hardest hit by any withdrawal of lending in the sector and this can jeopardise growth and productivity.

Despite nearly a decade of reform in the lending space since the financial crisis, with more types of finance than ever before, we found that SMEs across the UK, France and Germany say they are struggling to access the finance they need to invest and grow in their business. Just four in ten (41%) on average say they are able to access all finance they need from their preferred source. 16% can’t access enough capital at all, from any source and 5% of SMEs don’t even know where to access the capital they need to invest in and grow their business.

A lack of understanding among SMEs of their financial options and a lack of bespoke guidance from lenders may be part of the issue. Just 19% of SMEs say that the advice their bank gives them always meets their needs. This can result in SMEs accessing unsuitable financial products.

In our 2016 report, Banking on Growth: Closing the SME funding gap, we analysed the extent to which UK SMEs were utilising the wrong type of finance, and the impact this can have on their growth. Not only does securing the wrong financial product often prove costly, it often means SMEs do not have the long-term financial security they need to invest in boosting their productivity.

To learn more read our report, ‘The Power of Productivity: Measuring, understanding and improving productivity for SMEs’