Could 2015 be a year of growth for SMEs?

Around half of SMEs are planning to grow in 2015 but the latest research suggests that many remain unaware of the financial options that are available to them.


That’s according to the British Business Bank’s Small Business Finance Markets 2014 report, the first in a series of annual insights into SME finance markets. It shows that demand for financing among small businesses is changing with a growing number of firms focusing on growth and prosperity.


Of the firms raising finance, 54% did so to purchase new assets or to expand – a sharp rise from 39% of companies that did likewise only two years ago.


Meanwhile, the proportion of companies seeking finance to aid their cashflow decreased from 45% in 2012 to 33% this year.


White this does represent positive news for companies, the need to advance with care remains rife as business situations can change in an instant.


Professional assistance from insolvency practitioners should be sought if any cashflow issues cannot be overcome, as a change in how the company is run could be the solution.


A lack of knowledge was found to be the main issue to accessing finance, as 85% of firms were unaware of lease or hire purchase agreements while only 15% knew of mezzanine finance.


However, awareness of peer-to-peer lending and crowdfunding has increased, suggesting that firms are broadening their horizons as they look to grow.


Research into private equity finance for SMEs also revealed an increase from £1 billion in 2010 to £1.6 billion last year.


So far the British Business Bank has assisted around 35,000 SMEs to secure the capital they need for growth.


The picture is certainly a positive one for many small businesses in the UK, but threats do remain meaning a watchful eye on economic conditions is still required. Should businesses be able to access the finance they require then most of them could be able to push ahead with expansion plans.


Innovation is rife in the UK market and it makes the country one of the best locations in the world to start and grow a new business.


By Phil Smith


If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1144.

View all Business Insights