A survey has found that 73% of small businesses within the construction and manufacturing industries are now confident in their ability to raise finance.
The survey, on behalf of Platform Black, an Alternative Finance company, talked to managing directors, financial directors and owners of businesses with up to 250 employees and found that confidence is returning to the UK economy.
More than 70 per cent of companies questioned said they are ‘very confident’ or ‘fairly confident’ in their ability to raise the finance they need over the next 12 months.
Louise Beaumont, co-founder of Platform Black, said, “This is great news for the UK economy and shows the perception of restricted access to finance is receding at last. We welcome the fact that access to finance is no longer placing a choke chain around SME growth and its prospects for the future.
“Interestingly, recent figures from the Bank of England for the last quarter show that net lending to SMEs by banks was down by £0.7bn and yet the Alternative Finance market is growing significantly, with the peer-to-peer lending industry providing more than £1.5 billion to businesses by May this year. Clearly, a significant proportion of new money is coming from alternative lenders rather than the banks showing that Alternative Finance is offering businesses a real choice for equity, loans and invoice finance.”
The survey also revealed that confidence did not particularly vary from sector to sector. 73% of companies within the construction and manufacturing industries, 72% of companies within business services and 66% of companies within transport, retail and distribution sectors all said their confidence in their ability to raise funds was good.
What did affect business confidence, however, was company size in terms of employees and turnover. Business confidence was higher in medium businesses (50 to 249 employees) at 80%; six in ten of these medium businesses (62%) had a turnover of greater than £6.5 million. This is compared to micro businesses (1 to 9 employees) which had lower business confidence at 69%; three quarters of these micro businesses (75%) had a turnover of less than £632,000.
Platform Black is a member of the Alternative Business Funding collaboration, which is consulting with the Government on how to improve access to finance for SMEs following the commitments made by George Osborne in the March 2014 Budget.