The small business sector in the UK is continuously expanding as businesses pop up across the country every week. Statistics show that small businesses accounted for 99.3% of all private sector businesses at the start of 2016 and 99.9% of these businesses are small or medium-sized businesses (SMEs). It is for these reasons why attention needs to be given to the SME sector, to provide finance that is suitable and accessible.
As a start-up, finance is available to encourage the initial growth, but once they reach the development stage, with a clear route to profitability and a proven concept, opportunities to secure the right financial product via the traditional route decreases as banks make it harder to access finance. Although, there are some options on the market, most small business owners refuse to take up these opportunities. This may be due to the apprehension of going into debt or a fear of giving up equity in their company.
After the recession, finance was seen as too risky and now during Brexit, SMEs are facing a high level of uncertainty, with many preparing for the financial upheaval of Brexit as highlighted in the report by Boston Consulting Group and Clifford Chance for the Association of Financial Markets in Europe (AFME).
With all these uncertainties, it is important that small business owners are supported and given the right options for high growth. With dedication to their requirements and financial products that leave the control in their hands, inevitably the UK will secure long-term economic growth through a thriving SME sector, with the hopes of these small businesses becoming larger companies over time.
There is a large market of small businesses who are ready to take on the right financial product, from business loan providers like Ferratum Business. Offering a manageable loan option of up to £50,000 - Ferratum works with small business owners to support their needs. It is flexible finance options like these that will continue growth in the SME sector.
Times are changing and small business owners are no longer calling on their banks for new investment. Whether the banks computer says yes or no to their application, they are now seeking support elsewhere, as very few find it attractive having their loan secured to their residential property. If small businesses are to continue innovating, while having a positive effect on our workforce, they will need access to the right finance. Without these options, there will be less product originality, reduction in a skilled workforce, less international trade connections and inevitably, a decline in growth.
Why finance needs to be accessible:
1. To hire staff
2. Expand their business internationally
3. Test new product ideas
4. Purchase assets
5. Working capital
For reasons like these, it is very important for SMEs to have access to finance that offer terms they are happy with. Inevitably, having a more confident and clear approach to business finance - small businesses will have an even greater impact on our economy. This can be achieved through the growth of designated options, the right education and transparency, so they can choose the right financial product with confidence. By nurturing this confidence, offering top quality advice from the start, encouraging growth and ambition, SME’s will be given a strong incentive to continue innovating.