Finance conditions continuing to improve for small businesses

Finance conditions are continuing to improve for small businesses, with 2016 seeing strong growth in asset finance and peer-to-peer lending, according to a report from British Business Bank.

The Small Business Finance Markets Report found that asset finance reached £16.8 billion in 2016, whilst peer-to-peer business lending reached £1.3 billion.

Improved

The report showed that the flows of finance to small businesses in a range of markets have improved, whilst small businesses are becoming increasingly aware of the financial products that are available to them.

Small businesses were also found to be positive about the development of their business and their growth plans over the next year, with many choosing to continue operating in light of the EU referendum.

The report showed that businesses are cautious when it comes to looking for external finance, with over 70 per cent saying that they would prefer their business to grow at a slow rate rather than borrowing to speed up growth.

Following the report, British Business Bank will now focus on supporting smaller businesses to help boost economic growth in the UK and to help support the Government’s industrial strategy.

Potential

Commenting on the report, British Business Bank Chief Executive Officer, Keith Morgan, said: “Evidence in today’s report helps shape and direct the Bank’s efforts. Based on these insights, we will continue to focus our efforts on three key areas to help raise the growth potential of small businesses across the UK: providing capital to the scale-up businesses that play an important role in driving economic growth; addressing regional imbalances with initiatives like the Northern Powerhouse Investment Fund; and helping more small business know about and have confidence in using the finance options open to them.”