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February 14, 2018
By Greg Bolton, head of corporate finance at RMT Accountants & Business Advisors Ltd
It’s always nice to be able to report some positive news in challenging times, and new research suggesting that increasing number of small and medium-sized enterprises (SMEs) are expecting to grow over the next 12 months definitely falls into that category.
According to the latest Finance Monitor from research company BDRC, 51% of the SMEs that they questioned said they were planning on expansion within their business in the coming year, up from 48% in the previous quarter, which can only be good for both the UK economy that is mostly made up of such business and the bolstering of the ‘market confidence’ that has proved so elusive recently.
Another interesting revelation in the BDRC report was the fact that many SMEs appear to be turning away from traditional funding in favour of alternative methods of finance.
Just one in three SMES, it suggests, are using loans, overdrafts, commercial mortgages and credit cards to further growth, a figure which has remained almost unchanged from the last quarter, while the research suggests there was a five per cent increase in the number of businesses turning to friends and family for finance over the same period.
Whether this says more about the traditional providers of this type of finance or the SMEs that are approaching them is difficult to say from just bare numbers, but the fact remains that appropriate access to capital remains one of the key drivers for encouraging SMEs to grow, and thus sustain and create employment.
Regardless of national trends, SMEs in the north east have an additional avenue to explore for obtaining this capital, in the shape of the Finance For Business North East Fund, and the enthusiasm that has been shown for the various constituent parts of this initiative is clear evidence of the enduring ambition that the management teams within the north east’s SME community have for taking their businesses forward.
The golden rules for making yourself an attractive proposition to potential investors remain constant, whether you’re a small business or a major corporation – decide what your commercial objectives are, identify exactly how you intend to achieve them and demonstrate how these plans could be realised with the right type of outside investment support.
Being a small business is clearly no bar to thinking big, and it’s in everyone’s interest that our SMEs receive every encouragement to do so.
For further information or advice please contact Greg Bolton – email@example.com or call 0191 256 9500