Two thirds of SMEs seeking finance to grow



Two thirds of small- and medium-sized enterprises (SMEs) plan to seek growth funding in the next 12 months despite inflation-linked pressures, new research has found.

While investment intent is strong, around 40 per cent of firms said they have missed a business opportunity in the next 12 months due to lack of available finance.

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Close Brothers Asset Finance and Leasing commissioned the survey of 911 UK SMEs, which also revealed a decline in confidence in the macro environment – 54 per cent of respondents said they were concerned about a further economic slow-down.

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Soaring inflation was said to be having a negative impact on two thirds of surveyed businesses, while only a third feel that the Bank of England’s two per cent target is realistic.

A further 46 per cent of SMEs said they did not feel that raising interest rates is the right thing to do to help curb inflation.

55 per cent are raising employees’ wages to help them keep up with rising costs.

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Over three quarters of firms said they plan to pass additional costs onto customers, while the remaining 23 per cent have chosen to absorb the costs, which will impact their cash flow.

42 per cent of respondents said the increased cost of doing business has caused them cashflow issues.

“Businesses have, for some time now, borne the brunt of both rising costs and inflation along with supply chain problems that have made it difficult to plan – both finances and stock – while trying to meet customer demands,” said Neil Davies, chief executive of Close Brothers’ commercial division. “But it’s encouraging to see that firms are still keen to invest despite all the challenges they are facing.”