More than 800,000 SMEs in the UK have been turned down for property finance in the past five years, according to a new study from Together.

Research by the specialist lender – based on an online study among 300 SME owners or senior executives at firms that employ 250 people or fewer across the UK – showed that 28% of SMEs had seen property finance applications rejected, while 22% said they had struggled to find the funds to move or expand.

Together’s research also showed that even the 24% of SMEs that had successfully completed property moves or upgrades still struggled to navigate challenging funding processes.

Together head of corporate relationships, Andrew Charnley, commented: “Property finance is crucial to help SMEs – which are the lifeblood of the UK economy – expand and boost productivity as well as creating jobs and offering better career development to staff.

“It is, however, a worry that accessing the finance they need is such a strain on firms, and doubly worrying that the business practice of lenders is an issue with firms saying finance providers are inflexible and do not understand their businesses. This kind of inflexibility could be crippling the expansion plans of many entrepreneurial firms.”

Finding a suitable property was ranked as the biggest problem by SMEs – with 30% indicating it was an issue – but the next four biggest challenges were revealed to all be driven by issues with lenders and raising finance.

About 28% of firms said lenders were inflexible, while the same number – the equivalent of nearly 840,000 firms – had applications rejected during the process. Furthermore, 27% of SMEs indicated they had to resubmit applications, while 19% suggested lenders did not understand their businesses.

Charnley continued: “Lenders and other advisers can play a vital role in helping SMEs to deliver their plans but can also be a major barrier. Lenders need to look at the bigger picture when making decisions and not just adopt a ‘one size fits all’ approach.”

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