Contribution to GDP by SMEs in the hospitality sector has fallen by 0.2% through the recession, which is a stronger rate of decline than other sectors.
That is according to research from alternative lender Boost Capital which says lending to SMEs contracted by 6% (£2.6bn) between 2008 and 2012.
In the UK SMEs account for 56% of all hospitality businesses.
Marc Glazer, CEO of Boost Capital said: “Big sectors dominated by SMEs, like hospitality and construction, have shown comparatively lower growth than other sectors. If funding for these businesses continues to be constrained, their growth and ultimate contribution to Britain’s bottom line may fall far below its potential.”
The stunted growth in sectors that have a lot SMEs has been impacted by the recession and reluctance by banks to lend to smaller businesses, as found in a Government paper published by the UK Department for Business, Innovation and Skills that found a correlation between the size of a firm and likelihood of an overdraft or loan being rejected.
‘Alternative lenders’ are redressing the balance to provide options for growth for SMEs that have been overlooked by banks but the Treasury Select Committee has noted that many businesses are unaware of the finance options available.
