UK small businesses see second year of solid growth

Despite 22% of UK firms citing political instability as a threat, 51% claim not to be worried about Brexit

The UK’s small businesses have seen a second consecutive year of solid growth, with 64% reporting revenue growth in the past year, according to the annual Hiscox DNA of an Entrepreneur report.

Despite this, the gulf between large and small firms is widening with the country’s biggest businesses significantly outperforming smaller ones – 86% of those with turnover above £10m increased revenues.

Although 22% of UK businesses cited political instability as a main concern, 51% claimed not to be worried about the impact of Brexit. Interestingly, the number of businesses that think they are better off than the previous year has decreased from 40% to 36% in 2016, while optimism levels have dropped from 64% to 60% after three years of improvement.

The report also assessed attitudes on funding, finding that 16% of respondents think bank funding is now more difficult to access – up from 13% a year ago. Over the same period, the percentage of UK firms contemplating raising venture capital funding has increased marginally from 4% to 6%.

This stands in stark contrast to funding announcements from a number of banks to support small businesses including NatWest’s £1bn fund and HSBC’s £150m funding line for small companies across Europe.

There has been a marked decrease in business faith in government: the number of businesses that think government policies support entrepreneurs stands at 35% against 34% of those that don’t, whereas last year there was a 20% difference in favour of government policy.

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