SMEs should talk to their bank when seeking financial help and not just fill in an application form, says one industry body.
Andy Berrow, senior advisor for Business Link, said that banks viewed SMEs as a "mass market" and, because of this, employed credit scoring and trend analysis to reach a lending decision.
However, he added that: "The recommendation of a good lending official who understands something of what the business is about will usually help."
For this reason, he said, it was important to develop a personal relationship with the potential lender.
He also said that there were alternative sources of funding, with many young people starting their own business borrowing from family and friends or dipping in to their own savings.
A survey conducted by Shell LiveWIRE found that only 13 per sent of young entrepreneurs had obtained finance from a bank
A further 15 per cent managed to get a government loan or grant.
