Small businesses are crucial to the UK economy. According to the Federation of Small Businesses (FSB), there were 5.8 million small businesses at the start of this year, up 3.5% on last year. Although this may seem like a small increase, this data means that SMEs now account for 99.9% of the UK’s business population also accounting for three fifths of employment in the UK private sector and around half of its turnover. Nearly a fifth of all SMEs were operating in construction, wholesale and retail trade and repair and accounted for 14% of all SME employment and over a third of SME turnover. There is contrasting data surrounding SMEs’ need and demand for financial support. Although it would appear that small businesses are in more need of financing, research shows that not all SMEs want finance and it is suggested that this, although not the only reason, could lay blame on the economic uncertainty caused by Brexit. In fact, the FSB Voice of Small Business Index Report for Quarter 2 suggested that the number of small businesses aspiring to grow over the next 12 months has fallen at its lowest level since 2012.
The report presents an overall decline in business confidence across all regions, with the largest decline recorded in Yorkshire and the North East. Confidence among small businesses was recorded in Wales although this still represented a significant decline from the same period in 2018. Businesses in the construction and wholesale and retail trade sectors were two of the least confident sectors overall. The decrease in business confidence across the UK has also caused an increase in business owners planning on downsizing or closing which is now at its highest level since 2012.
It is for the above reasons why SMEs need to be made aware of the financing options available to them. There are now more options available to small businesses when looking for financing solutions. It can be the case that large UK banks may be reluctant to support small businesses, particularly start-ups. Invoice Finance, in particular, can be a great option for small businesses and start-ups as there is less criteria for lending when compared with banks. With small start-up businesses, it can often be impossible to start off without financial support especially if employees and suppliers need paying. Invoice Finance can allow businesses access to unpaid invoices prior to customers paying, allowing them to run as normal.
You can find out more here about the funding options Skipton Business Finance have to offer.