SMEs looking to invest in 2014

RA Now

The UK’s smallest firms are increasingly optimistic about the economic outlook in 2014, communicating plans to grow their businesses and finding access to finance a little easier.

According to the Small Business Index, a report analysing trends in the small business market produced by the Federation of Small Businesses, confidence among small firms has grown for the fourth consecutive quarter, from -5.6 in Q4 2012 to +21.6 in Q4 2013. This is replicated in every region of the UK and in each business sector. 
 
The data from more than 2,000 small business owners also shows that businesses expect to see rapid or moderate expansion in the next year. Alongside this, one in 10 businesses report running above capacity while a third are running at full capacity – both the highest figures since the Small Business Index began in 2010. 
 
Feeding into expansion plans, capital investment intentions continue to rise with almost a quarter (23.1%) expecting to invest in the next year. Businesses also want to take on more staff. 
 
Those businesses accepted for finance continue to report cheaper interest rates being charged, a direct result of Funding for Lending (FLS).
 
“Confidence has been in positive territory for a full year, giving economic growth solid foundations moving into 2014,” said John Allan, national chairman, FSB.
 
“Government must not be complacent – helpful initiatives were announced in the Autumn Statement, particularly on business rates. This, alongside the refocusing of Funding for Lending should continue to keep small firms in the spotlight. However a sustained recovery is perhaps some way off as the worldwide economy remains uncertain.”