Small and medium-sized enterprises are shrugging off the UK’s gloomy economic outlook with nearly three-quarters expecting growth next year, a new poll has found.
Small and medium-sized enterprises are shrugging off the UK’s gloomy economic outlook with nearly three-quarters expecting growth next year, a new poll has found.
The survey of 133 SMEs in the UK, conducted in October by credit reporting firm Experian, finds that 70 per cent expect sales growth in 2012, primarily in the domestic UK market. Almost one in five SMEs (18 per cent) also plan to increase their headcount next year.
Of those anticipating improved performance next year, increased sales to UK customers is seen as the biggest growth driver for more than two-thirds (68 per cent), although no value was placed on how much sales are expected rise. Some 12 per cent expect growth to originate from international sales and one in four (26 per cent) plan to expand into new areas or markets next year.
Three-quarters of the SMEs polled state they had access to additional cash that could used within their businesses, while 45 per cent claim to have access to cash reserves that could be used to fund growth activities. Nearly one in five have money set aside to cover emergencies.
The poll also shows that nearly a quarter (23 per cent) of businesses polled intend to take on new credit over the next year, with a further 33 per cent undecided as to whether they would take on new finance.
Of the SMEs that intend borrowing next year, the greatest demand will be for flexible forms of finance such as business overdrafts, which is the primary choice for 26 per cent, followed by company credit cards at 23 per cent. Just 8 per cent of businesses that had previously applied for commercial credit claimed to have been unable to obtain it.
Max Firth, managing director for business information services at Experian, comments, ‘Although this is just a snapshot of the SME market, our poll suggests that there is some optimism among SMEs. Those SMEs that do intend applying for credit are favouring flexible forms of finance, and some plan to use their capital reserves to fund growth and cash flow as well.’
