Be an investor in SMEs if you want to make a real difference to the UK economy

Posted: Tuesday, 18 June 2019 @ 10:03

Artisan bread might be in vogue, but the interest in buying local is much more important than a superior sandwich. It has a real impact on both the individual business owner, and the UK economy as a whole.  So why would you stop at bringing your custom to local businesses, when often, it’s investment that will help them grow?

Investing in SMEs is something that’s often overlooked in favour of big names. However, while there’s always risk in investing, a sensible approach to investing in SMEs, with the right due diligence, has as may positives as other areas of the market.

What you need to know about the UK SME market

  • At the moment, 99.9% of the 5.7 million companies operating in the UK are small to medium-sized. 
  • SMEs account for at least 99.5% of businesses in every main industry sector in the UK.
  • Instead of having their main offices in London, SMEs are spread out across the UK. Around 10% are in the north west, 8.7% in the south west and almost 15% are spread across the midlands. 
  • SMEs employ more people in the UK than those listed on the London Stock Exchange. The 5.7 million companies are staffed by 16.3 million people. That’s around 60% of all private sector employment in the UK.
  • Together the annual turnover of UK SMEs hit an estimated £2 trillion in 2018. That’s 52% of all private sector revenue.
  • In 2018, the London Stock Exchange showed that more than two thirds of the revenues earned by the companies listed on its FTSE100 came from overseas.

Being part of a positive future

The strength of SMEs gives a good insight into the country’s economy as a whole, and their separation from global markets means that investors can establish fair rates. While none of us should ever be blind to economic trends, and we should always be careful in our financial decisions, we should also be mindful of the need to positive and productive futures.

The UK has a history of industrialism, and it seems that the business spirit is alive and kicking, but with less coal and more carbon footprint awareness. That spirit is something that collectively we can nurture.  Excitingly, we have readily available avenues to do just that.  

For example, at Rivers Leasing our focus is on supporting SMEs through asset finance and working with brokers, suppliers and business owners. We have good corporate governance and practical, flexible policies and procedures.  

However, we also work towards positive outcomes rather than sticking to a prescriptive rule book. That allows us, and our investors, to support the growth of SMEs in the UK with care.


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