The Growth Blog

4 barriers stopping you from expanding your small business

Feb 19, 2019 2:41:06 PM / by inFund

What would you say is the biggest barrier to growth? Let's see a show of hands. I'm willing to bet you were thinking: “money.” It seems so obvious that it doesn't seem to need repeating. You don't even have to be in business to understand this piece

However there's a little more to it than that.

Cash flow

The reality for many businesses that are surviving but not growing is cash flow. Your clients are honest and decent, just like you are. However, of course, it's quite possible for one of them to miss a payment. Hey, many of us have been there. Who hasn't been in a tight spot before.

Unfortunately, simply getting by is not enough for your business to survive. Living from month to month is bad enough for those of us not in the game. One illness or a car breaking down can be devastating. For a business, this is deadly. That one client who is late, or even the chance that they may be late will likely prevent you from taking the risk and expanding.

This fear can keep many businesses from moving beyond month to month getting by. The sad reality is not breaking out of this cycle will increase the likelihood that the business will fail. The need for a quick cash infusion can make the difference between life and death

Fear of financing and/or Debt

Many hold the idea of borrowing or lending money to be distasteful. This belief dates back to the middle ages, where those who lent money for interest were considered to be committing usury. The concept of charging interest on a loan was considered sinful. This idea, is of course, archaic. Our modern economies could not run without the lending and borrowing of money.

But the fear still exists. It has negative connotations because we think of it in association with stress, or unfortunate events. However, it's important to look at financing as a way of growing and not just preventing emergencies. By taking this proactive approach you can spend money to expand instead of simply preventing contraction. In fact, if you look at many of the most successful businesses, they have all run on leverage, and borrowing.

You aren't putting your business at risk. Instead you are giving yourself the chance to succeed.

Fear of Rejection from Banks

Most banks take a very conservative approach, and for a good reason. They want to be absolutely certain that they can be repaid money they lend. However they often take this to a fault. Something in the distant past for a borrower can be seen as a reason for rejection, regardless of recent successes and credit reliability.

This fear can cause many businesses to assume that no financing is available at all, at least for a reasonable interest rate.

Fear of Alternative Lenders and More Debt

There is also a fear of alternative lenders, who offer unsecured loans. Credit cards and unsecured loans can be terrifying for many for reasons we already discussed. If you believe you can pay these off quickly, they can be more appealing. However the realisation that a 10,000 pound loan at 15% could result in paying 1500 in interest annually can turn many a business person away.

This is the wrong approach. This fear of unsecured credit does make some sense for individuals. Borrowing in this sense is reactive to desires, and the money is not being used as a way of generating income. On the other hand, from a business perspective debt is good for you. You use credit to increase cash flow. If the amount that can be gained is higher than the interest, then it becomes a no-brainer.

Lack of good talent

This one may seem a little different than the other items listed here, but hear me out. Quality talent is important for your business. It's as important for SMEs as for larger companies. However as an SME, you have an added challenge. Many millennials hold the belief that SMEs provide considerably lower salaries and fewer opportunities for advancement than in larger companies. According to one survey, almost half believe this.

This is something you need to address. If you cannot attract top talent, you are going to have a hard time growing and competing. There are legitimate reasons behind this. The smaller the company the more likely the company is oriented around short-term goals.

This does, of course, make some sense. If we need to make sure bills are paid and you are in business tomorrow, it's a bit hard to think about next year, or five years from now. This, unfortunately, can become a self-fulfilling prophecy. To be able to attract the best talent you need to pay them and offer them chances for advancement. If you have a hard time viewing the future, why would you expect your employees to be able to? They may join you for a short period but quickly jump ship the moment a better opportunity comes along.

Obtaining financing can help reverse this trend, and you can attract and keep the very best employees, who will have the opportunities and advancement that will come when you succeed.


Plan for the future by investing in your growth now. Of course it can be difficult when you are worried about making sure you can pay for next month’s bills. However, if you have a good funding source who will partner with you to make sure that you are successful, this can become a complete game-changer.

InFund is passionate about supporting the growth ambitions of SMEs in the UK. We provide fast access to funding that you can control on your own terms. By using our services you can make a big step toward bringing your business up to the next level.

Apply for funding today. Register in minutes and get a decision in hours. You could be just one step away from expanding your small business

Topics: Infund blog, Finance, Investing for growth


Written by inFund

inFund is a loan and credit facility provider supporting SMEs to grow and finance their ambitions.