Finance Providers Still Failing Small Businesses, Says ACCA’s Global Review of Access to Finance
A joint report was issued by the Association of Chartered Certified Accounts (ACCA) and Longitude Research which claimed that money lenders should alter the way they treat small and medium sized businesses that are looking for financial help or else they may have to face disruption.
The Association of Chartered Certified Accounts (global accounting body) used 5.5 years of financial data and detailed analysis of accounting professionals’ experience in obtaining finance to present its first review of ‘State of Business Finance’. The body observed that obtaining finance is convenient now than any other time since financial crunch. However, small businesses still find it difficult to raise funds in comparison to larger entities.
The condition of business funding is vital to the global accountancy body as more than fifty thousand of its members regularly assist different businesses in obtaining finance, including ten thousand members working in global capital markets.
ACCA thinks that one of the main issues is that the major portion of the business funds is still accessible by only risk free businesses i.e. the receiver of funds must be viewed as risk free or should provide substantial security. ACCA said that neither the security nor the risk free rank can truly ensure the protection which the finance lenders are looking for; instead the focus on these two things deprives some capable businesses of funds.
The global body feels that capable finance professionals will have a greater role to play in assisting businesses to obtain funds in the future due to following reason:
· Firstly, innovative and traditional money lenders need supply chain and operations related information in time. This necessitates accountants to work as partner in business.
· Secondly, accountants are expected to provide quasi assurance services to entities looking for funds.
· Thirdly, accountants need to explain to board of directors the long term impacts of finance related decisions as significant amount of business funds is provided by them.
· Lastly, with high number of financing options available, businesses need expert advice to make the right choice.