85% of SMEs say that they plan to invest over the next 12 months; mostly in recruiting staff, upgrading equipment or technology, and ramping up their marketing. This is according to the latest research from Barclaycard Payments.
The appetite to invest is being driven by the anticipation of improving economic conditions as we emerge from lockdown and, while the degree of pent up demand varies by sector, there is positive sentiment across the board. A new survey by the Federation of Small Businesses (FSB) shows half of small business owners (50%) predict that their business performance will improve in the next three months, compared to one in three (32%) who expect it to worsen. This is great news and the boost that we could all do with.
When it comes to finance, business growth or re-growth invariably creates a need for increased working capital and we're already seeing demand for finance from small and medium sized businesses on the rise.
According to iwoca’s quarterly SME Expert Index of UK brokers, which covers a four-week period in May, over a third (38%) of brokers had submitted more lending applications for unsecured finance compared to the four weeks prior to that, suggesting that small businesses are increasingly willing to use credit to support their growth and recovery.
Asset Finance is on the rise too, with the Finance and Leasing Association (FLA) reporting in May that new business was 106% up year-on-year. This is notwithstanding the ending of the CBILs and Bounceback loan schemes in March and their replacement with the less advantageous, but still good, Recovery Loan Scheme.
If you are planning investment for your business, we recommend projecting your requirements in advance and having a funding strategy in place. Securing funding is invariably easier if it is planned for six months down the line rather than chasing emergency financing at 48 hours’ notice.
We're here to help, so please talk to us about how we can help you forecast your requirements and present your business case to lenders in a way that is most likely to secure a 'yes' on competitive terms. Despite some supply issues, there are lenders out there with an appetite to lend and it is our job to help you find them. Getting it wrong is easy if you don't have the right support in your corner.