White Paper

Back to Borrowing?.

ERC White Paper No 8

Associated Themes
  • Finance

Discouraged Borrowers (DBs) are businesses which would like to borrow but which do not apply for bank finance because they either feel they would be turned down (‘indirectly discouraged’), or they’ve made informal enquiries but not proceeded with their application because the bank seemed reluctant to lend (‘directly discouraged’). We know a lot about who discouraged borrowers are but little about what influences whether a small business owner is discouraged or not. This paper explores those factors in more detail and identifies SME’s dissatisfaction with their banking relationship as a key driver.