The biggest priority for financial intermediaries is the need to educate UK small and medium-sized businesses on their funding options , according to an annual survey by Bibby Financial Services.

The study, conducted among nearly 200 financial advisers, found that 82% of intermediaries rate their clients’ understanding of the funding solutions available to them as average or below. This figure has only slightly decreased since 2009, when 87% claimed the same, indicating there is a long way to go in educating businesses about the finance solutions available to them, Bibby says.

This lack of knowledge is reinforced by the fact that more advisers than ever before (13%) say their clients are relying on credit cards to fund their business, which can become expensive in the long term due to high interest rates which can build up over time. In addition, 18% claim they are turning to family, friends and their own finances to support their enterprise, compared with just 8% in 2009.

90% of advisers believe that firms have an average or below understanding of invoice finance, while 84% believe this form of funding is still overlooked in favour of more traditional routes, despite the fact that some of these are becoming increasingly inaccessible for businesses due to stringent lending criteria.

However, 50% of advisers have actually increased the number of times they have recommended invoice finance to their clients this year.

When asked what question clients put to them more than any other, 50% of intermediaries claim they want to know how they can secure finance, this is comparative with last year when 53% cited the same.

In addition, 14% of advisers state business owners are concerned about getting clients to pay on time, which has increased slightly from 10% in 2009, suggesting that late payment is still a prevalent concern among UK firms.

Those questioned believe the events of the year – the General Election, emergency Budget and cuts in public sector spending announced in the Government Spending Review – have significantly affected the funding outlook of small businesses. 45% claim firms have become more cautious while over a third (37%) say they are more pessimistic as a result of these events.

Furthermore, the majority of financial advisers (46%) believe that the Government’s new Green Paper, which will propose that banks boost their lending to small businesses and help to promote a diverse range of finance solutions, will have no impact on the funding outlook of businesses. This suggests that intermediaries don’t believe government measures are going far enough to support firms.

Edward Rimmer, UK chief executive of Bibby Financial Services, said: “Despite the coalition Government’s efforts to support small and medium-sized businesses and tackle the issue of access to finance