46% of UK small businesses set for growth in 2015
Third of start-ups looking to raise working capital yet majority remain unaware of alternative funding options
Almost half of the UK’s small businesses are planning to expand in 2015, according to a new report released today by the government’s British Business Bank.
Assessing the state of Britain’s financial markets for small and medium enterprises, the Small Business Finance Markets 2014 surveyed 1,000 small firms and found that, despite the large number of start-ups seeking finance, the majority were unaware of the full range of alternative funding options available to them.
68% of businesses surveyed said they were “confident in their ability to obtain external finance” yet, when it came to funding avenues, over 65% had not heard of crowdfunding, peer-to-peer lending, export and import finance and mezzanine finance.
Whats more, the survey highlighted a need for better promotion of government funding with a staggering 33% of small and medium-sized businesses unaware that they could access funding via government and local authority grants.
Of those surveyed, the most commonly known forms of finance were credit cards (95%) and lease or hire purchase (85%).
When it came to the reasons for raising funding, the common responses were to purchase fixed assets (43%) and to support cashflow (33%).
Discussing the findings, business secretary Vince Cable said:
“This new research – the first of its kind by the British Business Bank – is a useful benchmark for measuring the challenges ahead in making British businesses aware of the various alternative finance options available in the market. This is particularly important given the findings also show that almost half of British small and medium enterprises plan to expand in the next year. I am confident more businesses will be able to realise those ambitions thanks to the new finance on offer, especially on the equity side.”
Keith Morgan, British Business Bank CEO, added:
“The challenge now is to connect the emerging demand for finance with the new forms of funding that are becoming available.”