New research carried out by the British Chambers of Commerce (BCC) in collaboration with Wesleyan Bank suggests that small and medium-sized enterprises (SMEs) are shying away from finance and failing to explore expansion opportunities.
According to the study, which surveyed 1,073 SMEs, almost two thirds (63 per cent) of small businesses with between one and nine employees have not applied for any finance in the past year.
The same goes for 39 per cent of SMEs with 50 or more employees, the report reveals.
In instances where SMEs did move to access finance, this was predominantly to plug gaps in their cash flow rather than to fund large-scale expansion or growth, the report found.
The survey, which quizzed SMEs about their expansion and investment plans, also found that the majority of businesses are focusing on ‘incremental investments’ as opposed to larger-scale projects.
It found that almost half (49 per cent) of firms are eyeing up ‘incremental investments’ in marketing and advertising this year, while a similar number are planning on pumping more money into either staff training or IT and data security.
Suren Thiru, Head of Economics at the BCC, voiced concerns that the Government is not doing enough to “kick-start business investment” and encourage broader SME growth.
“Firms need relief from the heavy burden of upfront costs which sap funds that could otherwise be spent on big capital expansions,” he said.
“Give companies the financial room to grow… and we’d see more long-term investment coming through.”
How will the changes in the Spring Budget affect pensions?
.@GOVUK has announced that £4 billion worth of finance will be available for overseas buyers of UK goods and services. How will your business and #InternationalTrade be affected? Read more at bit.ly/3EYc27H #Cardiff #Bridgend pic.twitter.com/rZhf9dD3Vn
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