Business Bank's Research Reveals Appetite For Growth
Almost half of small businesses in the UK are planning to grow in the next year, new research from the British Business Bank has found.
In its report, Small Business Finance Markets 2014, the bank revealed that 46% of SMEs are expecting to expand in the New Year, and 54% of companies raising finance did so to purchase fixed assets or to grow.
However, the report revealed some confusion about the finance options available to SMEs.
While 68% of firms surveyed were confident in their ability to secure external finance, only 15% knew about mezzanine finance, while only 36% considered angel investment as an option.
Meanwhile, only 20% knew a supplier of venture capital they could approach, while awareness of peer-to-peer lending and crowdfunding increased substantially in the past year.
According to the report, external equity investment in SMEs increased from £1bn in 2010 to £1.6bn last year.
Keith Morgan, Chief Executive of the British Business Bank, said: "It is clear from our research that there is increasing confidence among UK small businesses and an appetite for growth.
"The challenge now is to connect the emerging demand for finance with the new forms of funding that are becoming available."
Expert Opinion
It is interesting to see that many small businesses remain very confident about what the year ahead holds, with many also seriously considering finance as they think about how they will make their ambitions a reality. <br/> <br/>"However, there is clearly some level of disconnect between the appetite for finance and the knowledge many SMEs hold regarding the options available to them. It is clear that small businesses cannot ignore this and should seek specialist advice to carefully understand what steps they may be able to take on this issue." Fergal Dowling - Partner