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Growing Confidence for SMEs

There’s been mixed news about the economy recently – despite growth figures for the last quarter in 2012, there are many predictions which are sceptical about the UK’s ability to sustain this throughout 2013. Coupled with ongoing problems with the availability of bank lending, and the environment for SMEs is still shaky. However, there is evidence that many small  businesses are now becoming more confident – according to a survey conducted by Freelancer.co.uk, many SMEs are now investing in growth once again.

According to this survey, 58% of small businesses interviewed said they were now investing in growth plans. Whereas in the depths of the recession these may have been put on hold due to low business confidence and fears of ongoing tough economic climates, this perhaps shows that many SMEs are seeing the light at the end of the tunnel. Though many businesses are looking to start growing again, many are wary about taking on new staff, understandably given widespread redundancies during the recession. 34% said they would be investing in marketing, while 43% were planning on improving their online presence as a new outlet. This shows the importance for the internet for the prospects of many small businesses.

However, around 43% said they were planning on using their savings to fund this growth whereas 19% will be borrowing money from family and friends. This shows that the banks are still not willing to fund growth – they are trying to reduce ‘risky’ debt in the face of cautious attitudes built during the recession, and this is impacting on availability of loans and overdrafts for small businesses. Alternative methods of finance, such as factoring and invoice discounting, could be other options which are more feasible for businesses to access. By freeing up cash flow, they could give you the room to grow your business.

 

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