Connection Capital Founder Says UK's Smaller Firms Are Coping Well

A leading private equity investor has claimed the UK's SME community is in the "mood for growth" in 2014.

Speaking ahead of the British Private Equity and Venture Capital Association’s (BVCA) 2014 budget submission, in which it is expected experts will ask for the government to reduce regulation and do more to help hard-hit companies with business rates, Claire Madden, founder of Connection Capital, remarked the UK's smaller firms are coping well.

Ms Madden, who spoke to the Yorkshire Post, stated that in her experience SMEs are more keen than ever to exploit new markets and that support for expansion is in higher demand than ever.

"We are certainly seeing in terms of our portfolio companies and the deals that are coming through a lot of appetite for growth capital," Ms Madden explained.

While in previous years poor consumer demand and a faltering eurozone economy left many small businesses wondering what their long-term prospects were, recent GDP figures have given many a cause for optimism.

This positive outlook is shared by private investors too, with - according to the BVCA - around 90 per cent of all private equity and venture capital investment aimed at small businesses and startups.

Indeed, a recent report by the Confederation of British Industry found that there was an increase of 91 per cent in the number of non-bank loans provided in 2013 compared to a year earlier.

"If you track the deals that have been done in this part of the market place (the SME sector) there are a lot of businesses either changing ownership, growing and raising growth capital," Ms Madden said.

Earlier this week (February 25th) it was announced that the British Business Bank programme will invest £40 million through the peer-to-peer Funding Circle scheme.

Business secretary Vince Cable said the money will be used to help SMEs to expand and improve their chances of exploiting new markets.

The programme has already helped Kaizen, a luxury furniture manufacturer, to borrow £100,000 and fuel its growth.

Expert Opinion

We welcome Ms Madden’s comments and they certainly echo what we are seeing amongst businesses in the UK. <br/> <br/>”There is a great deal of positivity at the moment and it is vital that we allow SMEs to build on this, particularly in relation to access to finance. I’m pleased to say that it looks like progress has been made in this area. <br/> <br/>“Many of the economic indicators are pointing to strong levels of positive sentiment in many sectors. SMEs are at the centre of the UK economy and it is very encouraging that private equity is engaged with smaller businesses and looking to ensure that they are able to realise their growth ambitions.” <br/> <br/> Fergal Dowling - Partner