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Peer2Peer Finance News | August 18, 2019

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SME appetite for borrowing rises

SME appetite for borrowing rises
Suzie Neuwirth

SMES’ appetite for borrowing and perceived access to finance have improved over the last three months, signalling cautious optimism despite Brexit uncertainty.  

The quarterly enterprise index from Smith & Williamson found that 41 per cent of small businesses are looking to borrow money, up from 34 per cent the previous quarter. Their perceived access to finance has seen a more marked increase over the past three months, rising by 12 per cent to 47 per cent.

The accountancy, tax and investment management firm surveyed owner-managers and entrepreneurs across the UK about their views and confidence.

Read more: SMEs struggle to access finance as banks don’t meet their needs

“Our responses indicate that many businesses are borrowing to invest in internal infrastructure, such as their IT systems and capabilities,” said Guy Rigby, head of entrepreneurial services at Smith & Williamson.

“Many believe that the creation of solid foundations will leave them better able to face any negative headwinds, increasing resilience, efficiency and growth.

“There appears to be recognition that a failure to invest in infrastructure and growth could be just as detrimental as any negative external factors.”

Read more: SME confidence up but credit conditions worsen

The research also found that SMEs’ confidence in the UK economy was mixed, with half of respondents expecting an improvement in the next 12 months. But optimism in their own business prospects was high, with 76 per cent feeling positive about the year ahead.

However, just 49 per cent of the respondents believe that the current government is supportive of private enterprise – the third consecutive quarter in which the enterprise index found a decline in confidence in government policy.

Read more: Autumn Statement: Small businesses demand Brexit clarity

“Our survey responses show a plateauing of the extreme emotions following the June referendum,” said Rigby. “There was an initial panic following the Brexit decision and a huge relief rally when the world carried on turning. However, our respondents, perhaps buoyed by encouraging economic statistics and recent stock market highs, are now looking ahead to 2017 with a cautiously optimistic view.”

Read more: No Bregrets – How P2P is dealing with Brexit          

Read more: Autumn Statement: What does it mean for SME funding?