UK small business finance market is recovering, claims report
The UK’s small business finance market is on the road to recovery, according to the British Business Bank’s Small Business Finance Market Report. The report showed that bank lending is still the most popular form of finance, with growth increasing for four consecutive quarters.
Figures also showed an increase of 43% in equity finance deals in small UK businesses up to October 2015, along with a significant increase in peer-to-peer lending.
The majority of small businesses in the UK have said that they are confident about growth, with over 50% hoping to increase their turnover in 2016.
According to the report, there are some “long-term” challenges ahead for the UK economy, including raising productivity.
“As SMEs employ the majority of the UK private sector workforce, creating a dynamic smaller business sector is critical to enhancing national productivity,” the report said.
The UK now has a record number of 5.4 million smaller businesses, but fewer smaller businesses in the UK have “made the leap to materially grow.”
The report highlighted the improvements that having a higher number of scale-ups would provide, stating that it would “substantially impact” productivity, growth and create more jobs.
British Business Bank CEO Keith Morgan described the figures as “encouraging”, stating that “alternative finance markets are thriving” but added that there are still some areas that need attention.
Minister for Small Business Anna Soubry added that access to finance is still a “big issue” and that there needs to be more help for small businesses who are looking to invest and create more jobs.