A large number of small and medium-sized enterprises (SMEs) are expecting to see growth over the next 12 months amid signs of positive growth in the economy.
Information from research company BDRC, 51% of the SMEs questioned said they planned to expand their business, up from 48% in the previous quarter.
However, the survey showed that many businesses are turning away from traditional banking products in favour of alternative methods of finance.
Just one in three SMES are using loans, overdrafts, commercial mortgages and credit cards to further growth. This figure remains almost unchanged from the last quarter, fuelling concerns amongst some business groups that the banking industry will potentially halt economic growth rather than supporting it.
The research also suggests there was a 5% increase in the number of businesses turning to friends and family for finance.
Commenting on the findings, Phil Orford MBE, Chief Executive of the Forum of Private Business, said: ‘This latest data further highlights the urgent need for the banks to lend to businesses looking to grow and employ. Without further support for Britain’s SMEs, a key driving force behind the economy, the recovery could stall before it has been given a chance to take hold.
‘Businesses also need to have access to more information about the current finance support schemes, more comprehensive advice on the alternatives available and easier access to the appeals process when an application fails’.
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