A new study for specialist lender Together has indicated that hundreds of thousands of UK SMEs have been turned down for property finance in the past five years.

Nearly a quarter of small and medium-sized companies said they had struggled to find the funds to move or expand – with inflexible lenders and a shortage of suitable property proving the biggest problems.

The research shows that even the 24% which have successfully completed property moves or upgrades still struggled to navigate challenging funding processes.

Andrew Charnley, head of corporate relationships at Together, said businesses across the country were being turned down for finance, “potentially crippling their expansion plans”.

He said: “Property finance is crucial to help SMEs – which are the lifeblood of the UK economy – expand and boost productivity as well as creating jobs and offering better career development to staff.

“It is however a worry that accessing the finance they need is such a strain on firms, and doubly worrying that the business practice of lenders is an issue with firms saying finance providers are inflexible and do not understand their businesses.

“This kind of inflexibility could be crippling the expansion plans of many entrepreneurial firms.”

Finding a suitable property was ranked as the biggest problem by SMEs – 30% said it was an issue – but the next four biggest challenges were all driven by issues with lenders and raising finance.

About 28% of firms said lenders were inflexible, while the same number – the equivalent of nearly 840,000 firms – had applications rejected during the process.

27% said they had to resubmit applications and nearly one in five (19%) said lenders did not understand their businesses.

However, successfully completing property deals was good news for the economy, according to the survey, with 52% of firms increased revenue as a result. 35% said their profits increased and 47% of firms said they had taken on more staff as a result.

However, managing property moves or refurbishments can be a drain on SMEs, the research found. About one in 10 firms said project management took more executive time than expected while around 230,000 SMEs questioned said the property plans disrupted their existing business.

Charnley added: “Lenders and other advisers can play a vital role in helping SMEs to deliver their plans but can also be a major barrier. Lenders need to look at the bigger picture when making decisions and not just adopt a ‘one size fits all’ approach.”

The table below shows the picture around the country on how many SMEs have had property finance applications rejected and the numbers of firms who’ve been unable to move. Firms in the South West and Wales are most likely to have been turned down while those in the South East are the most likely to have found moving premises difficult.