Small and medium sized businesses need support in the face of on-going challenges

Edward Winterton, executive director at Bibby Financial Services, comments on the latest CBI’s quarterly SME Trends Survey which serves as a sobering reminder of the on-going challenges faced by UK businesses operating in both domestic and overseas markets:

Edward Winterton, executive director at Bibby Financial Services, comments on the latest CBI’s quarterly SME Trends Survey which serves as a sobering reminder of the on-going challenges faced by UK businesses operating in both domestic and overseas markets:

“Today’s announcement by the CBI that output and orders among small and medium-sized businesses has stagnated is naturally disappointing, and the dramatic fall in domestic and export orders at the fastest rate for more than more than two years will do little to assuage the fears of owners and managers of businesses across the nation.

“Sluggish economic growth and the decline on our high streets clearly continue to have a significant impact.

“But what is perhaps more concerning is the lack of commercial optimism among business owners and managers. Confidence remains an integral component of the nation’s ability to stave off the threat of recession, and that companies expect domestic demand to fall further and export orders only to stabilise over the next quarter suggests that the recovery sought by so many remains some way off.

“Moreover today’s announcement by the Item Club that lending to smaller businesses during 2012 is also likely to do little to boost confidence and it will be interesting to see to what extent small and medium-sized business owners are being granted access to credit when the Bank of England announces Project Merlin lending data next month.

“But while firms across the UK are evidently working harder than ever, it is questionable whether they are being given the best possible chance to thrive. Bibby Financial Services’ latest Business Factors Index found that many business owners believe the Government could be doing more to stimulate the recovery, with many calling on the State to lend more support to the small business community. This includes one in five calling for a loosening of credit lending criteria, more than one in 10 (12 per cent) urging the Government to focus on increasing public spending to stimulate confidence and a similar proportion (nine per cent) seeking a focus on policies which will help reduce the nation’s deficit.

“There remains an onus on the Government and the broader finance industry to ensure firms are sufficiently educated about the types of finance available to them outside of loans and overdrafts. It is imperative they continue to be granted access to the necessary funds which will enable them to feel more confident about the commercial landscape in the year ahead and ultimately stave off the threat of recession.“

Posted in Bibby Financial Services updates by Julia Legge on 07 February 2012.

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