Despite significant growth in the UK gig economy over recent years, new research suggests that the mainstream banking sector has failed to keep up with the fast pace of change, as one in five self-employed warn that difficulties obtaining bank finance could force them back into full time employment.
According to a survey of self-employed professionals and directors from across the UK carried out by the Federation of Small Businesses (FSB) in partnership with specialist lender Together, 88 per cent of self-employed workers said that high street lenders need to make finance more accessible for the self-employed, while 78 per cent called for the mainstream banks to change the way they classify the risk of providing a mortgage for someone who is self-employed.
“This is because so many lenders are too dependent on risk classifications which are seriously outdated and simply do not reflect the modern dynamics of the evolving UK workforce. The fact that one in five self-employed workers are reconsidering their employment options as a result of this issue just shows that the current system isn’t working. It also suggests that the lack of access to finance could curb entrepreneurship which is something we should be celebrating and encouraging.
“If you are self-employed and finding it difficult to borrow, talk to specialist finance providers that will take a more individual approach, as you’ll find that whilst requirements vary with different lenders, there are tailored products out there, so don’t be put off at the first hurdle.”