A survey on behalf of Platform Black has found that 71 percent of small businesses are now confident in their ability to raise finance.
The survey, compiled by IFF Research, talked to 500 managing directors, financial directors and owners of businesses with up to 250 employees and found that confidence is returning to the UK economy. More than 70 percent of companies questioned said they are very confident or fairly confident in their ability to raise the finance they need over the next 12 months.
Louise Beaumont, Co-founder of Platform Black, which has advanced more than £65 million to SMEs since its inception two years ago, commented on the figures: “This is great news for the UK economy and shows the perception of restricted access to finance is receding at last. We welcome the fact that access to finance is no longer placing a choke chain around SME growth and its prospects for the future.
“Interestingly, recent figures from the Bank of England for the last quarter show that net lending to SMEs by banks was down by £0.7 billion and yet the alternative finance market is growing significantly, with the peer-to-peer lending industry providing more than £1.5 billion to businesses by May this year. Clearly, a significant proportion of new money is coming from alternative lenders rather than the banks showing that alternative finance is offering businesses a real choice for equity, loans and invoice finance – the bank is no longer the first, last and only port of call.”
The survey also revealed that confidence did not particularly vary from sector to sector. Indeed, 73 percent of companies within the construction and manufacturing industries, 72 percent of companies within business services and 66 percent of companies within transport, retail and distribution sectors all said their confidence in their ability to raise funds was good.
What did affect business confidence, however, was company size in terms of employees and turnover. Business confidence was higher in medium businesses (50 to 249 employees) at 80 percent; six in 10 of these medium businesses (62 percent) had a turnover of greater than £6.5 million. This is compared to micro businesses (one to nine employees) which had lower business confidence at 69 percent; three quarters of these micro businesses (75 percent) had a turnover of less than £632,000.