Personal savings and credit cards are becoming more common forms of SME capital, findings from Western Union show.

The money transfer service’s International Trade Monitor reveals that access to credit continues to be a worry for SMEs, with 30 per cent saying that its is a top concern.

The research also finds that 21 per cent are turning away from banks and actively considering alternative forms of finance. A survey breakdown reveals that the top three sources of funding being considered are asset-based finance (44 per cent), factoring account receivables (31 per cent) and personal savings (26 per cent).

Furthermore, some 20 per cent of SMEs surveyed are looking beyond these three options by utilising credit cards. Of those questioned, one in ten have already used the practice.

Gareth Heald, UK finance director at Western Union Business Solutions, comments, ‘We have now seen confidence in credit availability hit an all-time low two quarters in a row, indicating that something is not working.

‘The fact that businesses are increasingly turning away from banks and dipping into their personal savings – and credit cards – is a real worry.’

Western Union’s study also shows that SMEs predict that a recovery will be driven by trade with emerging markets, with 77 per cent indicating this.

Of SMEs which currently trade with emerging markets, 37 per cent expect to increase trade volumes. A quarter of those which do not currently trade with emerging markets plan to expand business operations to include them in the next 6-12 months.

Heald adds, ‘While SME’s views on an export-led recovery are mixed, there are green-shoots of positivity with SMEs planning to increase trade with emerging markets.

‘For many, it has become a necessity as the Eurozone continues to contract; but also suggests SMEs are not sitting on their hands waiting for things to improve, they are creating their own markets.’