The UK economic outlook isn’t looking too promising – though this definitely won’t be news, the British Chamber of Commerce has joined the CBI in cutting its growth forecast for the UK in both 2012 and 2013. This won’t be what many small businesses will want to hear, especially with the ongoing trouble in both the Eurozone and the UK domestic market.
The BCC has called on the Bank of England to invest in small business and even larger companies by buying loans as an alternate method to boost the economy. The Chamber has warned that the UK government is already going to miss its financial targets for reducing the budget deficit by the end of this parliament. The goalposts have perhaps changed since the coalition government’s economic policy was enacted in the end of 2010.
Decisive action is what’s needed from the government if there’s going to be an upturn in the economy – the BCC said that it expects the UK economy to contract by 0.4% in 2012, amending previous estimates of 0.1% growth. In 2013, it has downgraded growth forecasts from 1.9% to just 1.2%. In order to reinvigorate this situation, the BCC is encouraging the government to implement a new infrastructure programme with some real power behind it.
These wider economic issues impact not only on the business confidence of the country’s SMEs, but also has negatively affected small business lending – getting access to the funds needed is often a tricky prospect for small businesses. This of course doesn’t improve growth prospects, especially when small businesses are the lifeblood of the economy.
Looking into alternative funding can help small businesses to grow and develop. The government has backed business finance options such as invoice factoring to fill the gap created by increasingly stringent bank lending requirements. Despite disappointing growth forecasts, if you know your options it’s still possible to give your business the best chance of growth possible.