Aldermore’s outlook for SMEs in 2020
Tim Boag, group managing director of business finance at Aldermore | 15:50 Tuesday 4th February 2020 | 1
As we enter 2020, it’s worth reflecting on how the economic landscape in which UK small businesses currently operate in is changing.
From acclimatising to a post-Brexit Britain to ensuring adequate access to funding and keeping up with technology advances, the year ahead looks set to be a busy one for the businesses that form the backbone of the British economy.
The funding challenges SMEs face still needs tackling
Securing access to funding can be a real issue for many SMEs. Aldermore’s research showed that in 2019, a fifth of SMEs (19%) missed out on an opportunity as a result of a lack of funding. The difficulty many SMEs have in acquiring capital poses particular problems for those SMEs focusing on expanding.
Achieving growth is the top business objective for almost two-fifths of SMEs (37%), while nearly a quarter (24%) are prioritising the development and expansion of their products and services. It’s important that lenders make every effort to ensure SMEs have easier access to working capital so they can innovate, grow and keep up to date with the latest developments in technology.
The dust has not settled yet regarding Brexit
Given that Brexit trade negotiations on our future relationship with the EU haven’t started yet, SMEs should not rule out the possibility of disruption within their supply chains when the deadline for these negotiations expires at the end of 2020. The fact nearly half of SMEs (49%) do not have contingency plans in place should their biggest supplier fail and one in 10 SMEs believe they would not survive disruption to their supply chain is a concern.
Businesses, particularly those with close links to Europe, should undertake contingency planning in order to ensure that they are able to mitigate sudden changes in their supply chain. At Aldermore, we are working closely with SMEs to assist them with navigating these changes by helping them access the finance they might need. Businesses should also take a look at the UK Finance website which has a number of guidance briefs on Brexit.
Technology continues to play a key part
It’s well known that technology is playing an increasingly important role in simplifying daily business activities. Yet as technology becomes more sophisticated, it’s important that SMEs don’t lose sight of the ‘human touch’ when conducting business with their customers.
Aldermore’s new online portal for brokers asset backer and our new automated credit underwriting system are just two examples where we are embracing technology. Both systems help us to provide a user-friendly and easily accessible service, which simplifies and improves the efficiency of transactions between small businesses and brokers. Importantly, on both systems, we retain an important degree of human interaction with our customers, especially around the more complicated transactions.
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