According to a report recently released, 46% of Small and Medium Enterprises in the UK are expecting to grow during 2015.
The Small Business Finance Markets 2014, a report produced by the Government’s British Business Bank, looked at 1,000 SMEs and discovered that although finance was frequently sought out by small businesses, many remained unaware of alternative sources of funding.
The report revealed that 33% of businesses did not know about the funding available through grants from the Government and Local Authority, which indicates that promotion for the various government schemes has not been as thorough as intended. Over two thirds of the respondents said that they felt “confident in their ability to obtain external finance”, while a further 65% said that they had not heard of peer-to-peer lending, crowd funding or mezzanine finance.
When asked about current finance solutions, 95% relied on credit cards, while leasing and hire purchase was the favourite of 85%. According to Vince Cable, the report will provide valuable insight for the Government, so that awareness of business finance can be improved. Cable said that this was crucial, adding:
“This is particularly important given the findings also show that almost half of British small and medium enterprises plan to expand in the next year.”
For those businesses planning growth for 2015, some injection of finance will be necessary, to provide larger business premises, equipment, employees and other extra costs associated with expansion.
Sources of finance
Other than credit cards and hire purchase, which can be expensive and risky, there are alternative sources available. You may be able to borrow from friends or family, depending on the level of finance required. Loans and grants are sometimes given out by business support organisations, like the Carbon Trust. These organisations usually have a social objective in mind, like improving the employment prospects of a deprived area. Business angels, which are private investors, will often provide investment in return for a share of the company.
Ways to boost growth
Consider moving into new markets, perhaps exporting or opening up a new branch of the business. You may want to improve your existing sales, which will involve recruiting more staff. Trading online could be another growth strategy and will reach potential clients worldwide.
If you want advice concerning finance or any aspect of business growth, contact us here at The Accountancy Partnership. If you have implemented a strategy for 2015, share the details with us using the ‘comments’ box.
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