Posted: Tuesday, 15 October 2019 @ 08:52
While it's the big names in business that tend to make headlines, in the UK it is the small companies that have the biggest impact on the economy and the jobs market. So with all the socio-political upheaval going on, and the poignant need to take a proactive approach to economic growth, how can we do more to support SMEs?
The SME landscape
As you may already know, SMEs account for at least 99.5% of the businesses in every main industry sector in the UK. Together their annual turnover was estimated to hit £2 trillion in 2018, making up 52% of all private sector revenue. Not only that, but these companies were staffed by 16.3 million people, meaning they provided some 60% of all private sector employment in the UK. Even in the financial hub of The City of London, which employs 10% of London's total workforce, 99% of its 23,580 businesses are SMEs (although the large firms are very large indeed).
We know we need to support SMEs
As if we needed more reasons than that to recognise the value of SMEs, the Economic and Social Research Council has said: "Contributing 47% of revenue to the UK economy, small and medium-sized enterprises (SMEs) have a key role in boosting productivity “but need support to expand business and increase impact [...] Access to capital is a critical factor for SME growth."
Believing our collective interest in SMEs to go beyond financial wellbeing, the UN's Sustainable Development Goals for Small Businesses also cited the global importance of SME development, and made the case for SME lending. Understanding that the volume of SMEs around the world means they have a significant role to play in the "progression toward the sustainable development goals", they made it clear that central to making that happen is identifying opportunities to increase sustainable lending.
Where SMEs can access financial support
So here we are, with the fantastic, entrepreneurial resource, and yet SMEs are often overlooked when seeking to borrow in order to expand or fund their working capital requirements. According to the Bank of England's statistics on corporate lending, after a spike in 2013, there has been no significant increase in the level of money being made available to UK companies to borrow. This is despite more than 800,000 new companies being launched since then.
Unlike their larger counterparts, SMEs generally aren't in a position to draw on international capital markets, but this is where asset finance funders like Rivers Leasing are able to help. Filling this gap in the market, lenders like Rivers Leasing are designed with SMEs in mind. We understand the particular challenges of running small and medium sized businesses, the value of a strong human relationship and the security in the knowledge that you can pick up the phone and actually talk to someone when you want to, that there's more to a company than the simple facts and figures on a piece of paper and that fast turnarounds can make a big difference.
It takes a lot from individuals and their teams to start, develop and make a success of a business, and carefully considered access to capital can make all the difference.
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