Supporting SME growth in times of uncertainty
Mark Sismey-Durrant, chief executive officer at Hampshire Trust Bank | 16:57 Wednesday 11th October 2017
Since the country voted to leave the European Union (EU) over a year ago, businesses have faced a prolonged period of political and economic uncertainty .
Accounting for more than 99% of UK businesses, small- and medium-sized enterprises (SMEs) have a crucial role to play in creating jobs and powering the economy at both a national and regional level and it's vital that this sector is supported to ensure future growth.
According to our SME Growth Watch research – the annual report we commissioned with the Centre for Economic and Business Research (Cebr) – SMEs in the top 10 cities in the UK are forecast to contribute £241bn to the economy by 2025, a 19% increase on the £202bn contributed in 2016. Over the same time period, the research predicted that the number of SMEs will increase by 21% to more than one million, with the number of people employed by this sector also rising by 21% to over 4.8 million.
This is positive news. However, in order to ensure UK SMEs meet their full potential and expand at the rate forecast in our report, we need the government to keep the spotlight on smaller companies and to help create the conditions that will support their continued growth.
Boosting business confidence will be key in the months and, indeed, years ahead as we exit the EU. With this in mind, it is concerning that our research showed there had been a drop in business confidence, with 44% of respondents stating they were optimistic about the long-term economic prospects of the region they operated in, compared with 58% in 2016.
Our study also revealed that more than a third (34%) of SMEs felt their business growth expectations had decreased following the decision to leave the EU, compared with 10% who said that growth expectations had increased. This shows how important it is to provide certainty about the post-Brexit business environment as soon as possible.
On the positive side, our research showed that 37% of SMEs said they were likely to invest in expansion in the coming year, which indicated that smaller firms are set to continue to drive economic growth. We believe this is where specialist banks can help.
Specialist banks have an important role to play in providing finance to the SME sectors in which they operate; sectors which may have been overlooked by the traditional high street banks. The increased range of banking options now available should mean that SMEs are more able to find funding that meets their specific requirements and business needs. By working together, we believe we can support SMEs through this period of uncertainty and help build strong foundations to achieve forecasted future growth.
For more information, download part one of our SME Growth Watch 2017/18 report.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Sainsbury’s Bank withdraws all base rate tracker products
Sainsbury’s Bank has removed all of its base rate tracker mortgage products with immediate effect...
Leek United extends mortgage offer period
Leek United Building Society has announced that it has doubled the offer period on its mortgages from three to six months...
STB strengthens real estate finance division
Secure Trust Bank (STB) has announced the appointment of Chris King (pictured above) and Andy Thomson to lead the company’s real estate finance division across London and the South East...
CYBG and Virgin Money agree takeover offer
The boards of Virgin Money Holdings (UK) PLC and CYBG PLC have agreed the terms of a recommended all-share offer to be made by CYBG for Virgin Money...
UTB extends max loan size on second charge mortgages
United Trust Bank has increased the maximum loan size on its second charge mortgages from £250,000 to £400,000...
BBB launches online information hub
The British Business Bank has introduced an online hub that provides information regarding the finance options available to scale-up, high-growth and potential high-growth smaller businesses...
Metro Bank updates mortgage rates
Metro Bank has refreshed the rates across its residential, buy-to-let (BTL) and large loan ranges...
Our response to the Treasury committee's SME finance inquiry
Earlier this year, the Treasury committee launched an inquiry into SME finance looking at a number of issues...
Anthony Browne joins Coconut board
Coconut – the smart current account for freelancers and the self-employed – has appointed Anthony Browne (pictured above) to its board...
Cambridge & Counties to launch new products and expand UK reach
Specialist bank Cambridge & Counties has revealed that it aims to cover the entire country within the next few years, as well as expanding its product suite...
OakNorth provides £7.3m loan to luxury hotel chain
OakNorth has completed a £73m loan to Z Hotels, bringing its total lending to the hotel group to £225m...