Small businesses in the UK which use invoice
finance are more confident of growth in 2012 than those who don’t,
but overall negativity prevails.
A survey conducted by invoice finance broker
Hilton-Baird Financial Solutions found 50% of companies which use
invoice finance facilities anticipated growth in 2012 compared to
31% of all SMEs questioned.
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Despite a level of positivity from some firms,
most SMEs are apprehensive as they enter 2012.
One-fifth of the 417 business owners and
finance directors surveyed for the biannual SME Trends Index
expected their businesses to contract over the next six months.
Many of the businesses blamed negativity in
the UK media of creating a “self-fulfilling prophecy” of gloom and
doom and a scarcity of funding for their bleak outlook.
One respondent to the survey said: “It would
be helpful if all types of media stopped spreading negative news.
It is so depressing when it is all doom and gloom. If people feel
there is hope, everyone can face the future with a more positive
outlook. Now there is never any good news – everything is talked
down.”
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By GlobalDataAnother cause of concern was limited access to
funding. “There is not enough money circulating,” said a
respondent. “Businesses are relying on bigger and bigger overdrafts
where previously none were required. Small businesses cannot carry
the financial burden of non-payment of bills while the banks are
not prepared to facilitate credit to the level it is required.”
Hilton-Baird also predicted business owners
will choose to ‘horde’ their cash rather than invest for the
future, citing the news that the independent Office for Budget
Responsibility has downgraded its economic growth forecast for 2012
to just 0.7% as evidence.
Evette Orams, managing director of
Hilton-Baird Financial Solutions, said the survey showed SMEs were
suffering a lack of confidence which would lead firms to think
twice about or defer investment decisions.
She said: “The difficulties firms have faced
in accessing traditional sources of bank finance has served to
exacerbate issues, but, by exploring other options available,
owners can give themselves the best chances of growth and take
measures towards safeguarding their long-term stability.”
grant.collinson@vrlfinancialnews.com
