Is small business confidence starting to increase within the UK business sector? There’s a lot of turmoil still within the SME community, but things could be looking up, at least marginally. Investment intentions may have fallen and access to small business finance is still acting as a barrier to growth, but confidence is still better than it was – at least according to the latest ‘Voice of Small Business’ Index from the Federation of Small Businesses (FSB).
The report covers the first quarter of this year, and shows a welcome increase in confidence from amongst the small business community. It has moved from a negative reading of -5.6 in Q4 of 2012 to +6.3 in Q1 of 2013. However, it’s not all good news – there was definite caution still palpable with fewer businesses expecting to grow this year, down from 56% in the final quarter of last year to 54% in 2013.
But what were the perceived barriers to growth? Many firms were citing the domestic economy, customer demand and access to finance as the biggest obstacles for them to achieve good growth. Somewhat worringly, the number of small business approaching the banks for finance has started to fall. – with the Budget due to be announced on March 20th, hopefully this will be something the government will be addressing. With initiatives such as Funding for Lending and the Business Bank being supported by the government, small business finance is an issue on their mind, but not one which has found a suitable resolution as of yet.
Year on year, businesses applying for finance has fallen – 23% in Q1 of 2012 to 20% in Q1 of 2013. What’s more, the percentage of those accepted has also fallen, from nearly 45% to just over 40%. This paints a worrying picture, where fewer businesses are applying and being successful in their quest for finance.
Will all this be addressed in the Budget? Over to you, Mr Osbourne.