MORE than a third (42 per cent) of small- and medium-sized enterprises (SMEs) are now using external finance, new research claims.
A survey of 4,500 small businesses by consultancy firm BVA BDRC also found that a further four per cent are currently searching for finance. With 5.7 million SMEs in the UK, that means there are around 225,000 small businesses seeking finance at the moment.
Of those seeking finance, around half are looking for growth finance, the BVA BDRC said in its SME Finance Monitor report for the year ending in the second quarter of 2019.
The report looks at the health of the SME economy and reflects the current trends in access to finance for SMEs.
“This report serves as a barometer for the SME economy, which plays such a vital role in the UK, making up 98 per cent of private sector businesses and 60 per cent of employment,” Luke Davis, chief executive of IW Capital said.
“The ambition and growth potential of these businesses is almost unrivalled, and with almost a third having grown recently support for this must be seen as a key driver for the UK economy.”
80 per cent of surveyed businesses reported profitability and 36 per cent said they had grown in the last 12 months.
However, looking ahead, four in 10 SMEs saw political uncertainty, the economic climate or regulatory challenges as a barrier to growth.