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Average SME plans to invest £321k to grow their business

New research from Aldermore’s SME Growth Index has revealed the investment and growth plans of small and medium-sized enterprises (SMEs) in the UK. Despite the ongoing cost-of-living crisis, SMEs plan to spend an average of £321K on growth strategies over the next year. One in eight (12%) SMEs plan to spend over £1 million investing in growth.

SMEs plan to grow online but curb talent spend

A third of businesses want to expand their customer base (33%) and grow their current products and services (29%) in 2023, while also reducing costs to combat the cost-of-living crisis (30%).

To reach their goals, business leaders plan to invest in their online presence. One in four SMEs (26%) will put money into improving or building websites and apps over the next year. This is in addition to investing in digital marketing (24%).

Interestingly, following the ‘Great Resignation’ fears that saw SME-leaders prioritise talent spend in 2022, talent acquisition and increases to employee salary and benefits are likely to see the least investment (17% each respectively) over the next year.

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Business leaders continue to put hands in their own pockets to invest

SMEs will often turn to business savings (27%) or various forms of business finance (e.g., asset finance – 11%) to meet their goals. However, nearly two out of five SMEs (18%) will turn to their personal savings and over one in ten will use their own overdraft (12%) to meet business costs.

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Barriers to growth

Despite optimistic plans to invest heavily in the coming year, the biggest concerns SMEs are faced with are high energy costs (24%) and double-digit inflation rises (24%). This will represent the biggest barrier to business growth in 2023.

Those concerned about inflation costs estimate it could lead to delays in existing projects (19%), missed opportunities for growth (21%), and difficulties securing new deals (20%).

Tim Boag (pictured), group managing director of business finance at Aldermore said: “SMEs are the backbone of our business community and their ambitious growth plans over the next year bodes well for the economy, however they also face challenges brought about by high inflation and soaring energy costs.

“At Aldermore, we’ve supported SMEs through challenging times. It’s great to see from their plans that a digital presence for many has become a major priority, as consumer expectations have evolved post-pandemic.

“For business leaders, there are many sources of investment, be it utilising savings or accessing a range of specialist finance products; and at Aldermore we remain fully committed to backing businesses to realise their ambitions.”

By Lisa Laverick

Source: Asset Finance International

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Significant Rise in UK SMEs Borrowing Money Expected in 2023

The majority of UK SMEs (88%) plan to lean on business finance and credit this year according to new research carried out by solution-led fintech provider Nucleus Commercial Finance (NCF).

As the economic situation continues to challenge the outlook and stability of UK SMEs, it is revealed that only 12% of SMEs say they have no plans to borrow any money over the next 12 months – this rises to 29% when including sole traders and micro businesses. With interest rates still at record high levels, this is going to place a real financial burden on UK businesses.

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The expected borrowing is not, however, solely to patch holes. The reason most commonly cited by small and medium sized businesses is to enable them to seize growth opportunities (38%). More than a third stated that they plan to borrow in order to help employees with the rising cost of living (34%). A similar number said that borrowing would be driven by a determination to use it to make the business more environmentally sustainable.

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Rising costs and financial stress are still having an impact, however. A third (33%) of small and medium sized businesses expect to use business finance to cover unavoidable rising overheads, while one in five (20%) are likely to do so in order to pay off existing debt.

Source: Fintech Finance News

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5 Tips To Make Your Business Stand Out In A Crowd Of Competitors

Separating your business from the pack is key to success in any industry. How do you make sure your business stands out from the rest? Superb service and product quality are critical, but how your business is marketed and perceived will also decide your success and growth. With that in mind, let’s look at our five tips for helping your business stand out in a crowd of competitors.

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Tip 1: Establish Your Selling Point
What actually makes your business special? Why should a consumer choose you over a competitor?

Having an answer to these questions will determine your business’ selling point and is the steppingstone towards proving your ‘why’ to consumers. Establishing this early on is paramount or your confidence as a business owner will be lacklustre.

After your selling point is cemented the next challenge smaller businesses often face is gathering the team to support these operations. This can be mitigated through virtual office providers such as Servcorp which offer businesses a fully trained support team. As a small business, having your own receptionist, secretarial assistance and I.T support without needing to undergo the hiring and training process is a large cost plus time saver – after all, your time is money.

Businesses also receive this staff support at the fraction of the cost they would otherwise be paying.

Tip 2: Present a professional working environment

Many businesses find it challenging to create a professional working environment to impress their clients, especially for newer companies competing in major global markets on a limited budget. Traditional office spaces require long and costly leases, with break-out clauses only every few years, if at all.

A more convenient and cost-effective solution is a serviced office. These can be rented at a far less cost than a traditional office, whilst still being located in major business hubs like London and New York. Moreover, customers will enter an unbranded reception area allowing businesses to imply that they control the entire floor.

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Tip 3: It’s all about Marketing
Your product may be superior to competitors, but it will all be meaningless without adroit messaging and unique marketing. Your business is likely to have thousands of competitors, which is why the first step is to complete a competition analysis.

Comprehensively understanding what your competitors do well, recognising trends and identifying where others are failing will provide your business the strategic insight needed. From this your business will have a decisive direction on its marketing goals, however finding new methods to secure a commercial advantage will accelerate your point of difference.

For example, using a virtual office can provide an established look for smaller businesses based in the UK. With a virtual office your company can legally register its business address as the virtual office’s address.

Tip 4: Always provide excellent customer service
Customers expect and deserve excellent service when dealing with you. Make sure you have processes to deliver the highest quality customer service and ensure that all your staff are trained to meet these expectations.

Whether it’s the front desk staff, your Customer Service team, or a manager calling back, providing the best care for your client will help retain them over the long term. Even an unhappy customer can be won back if the service they receive after a problem is effective and genuine.

Tip 5: Network!
Get discovered by networking. There are many ways to find networking opportunities. Meetup groups, seminars, conferences, and industry events are great ways to meet like-minded people. This an opportunity to make business partners and scope out your competition at the same time.

And don’t forget the power of social media – there’s an app for almost anything these days!

By creating meaningful relationships in your industry, you can leverage audiences and gain exposure for your business. It’s also worth noting that all Servcorp’s serviced and virtual office customers gain access to Servcorp’s online networking community of 50,000+ global businesses and networking events, providing them with a significant additional value from their small investment.

Source: Real Business

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How To Get A Business Loan

Whether you’re planning to expand your business with new premises or equipment or to invest in recruitment or marketing, you may be considering taking out a business loan.

To help you decide whether a business loan is the right finance option for you, here we take a look at what they are, what you’ll need to apply for one, and the alternatives, as well as answering some common questions about business loans.

What is a business loan?

A business loan is a form of borrowing for commercial businesses rather than individuals. Some may be more suitable for start-up businesses while others may only be suitable for businesses with a certain number of years of filed accounts.

You’ll usually repay the amount you borrow in monthly instalments over an agreed period of time, with interest on top. Typically, business loans are for amounts from around £1,000 up to potentially millions of pounds.

Are business loans secured?

Business loans can be secured or unsecured. A secured loan is one that is linked to an asset, such as property, vehicles or stock. This means that if you can’t make payments, the lender may take your asset to pay for the loan.

As there is less risk to the lender, secured loans are usually for higher amounts and interest rates are usually lower.

Unsecured loans don’t require an asset as security so tend to be for smaller sums and come with higher interest rates. Unsecured loans may be more suitable for small businesses without large assets.

Some lenders will ask for a personal guarantee from a company director for an unsecured loan.

What types of business loan are there?

Some of the most common types of business loans include:

Bank loan
With a bank business loan, you’ll borrow a set amount of cash from a bank or building society over an agreed period of time, with interest.

Government-backed Start Up Loan
This is an unsecured personal loan backed by the government to start or grow your business. To apply for this type of loan, you must live in the UK, be over the age of 18 and have (or plan to start) a UK-based business that’s been fully trading for less than 24 months.

Start Up Loans have a fixed interest rate of 6%, are for amounts of from £500 to £25,000, and you can repay the loan over a period of one to five years.

Short-term business loan
Short-term business loans are aimed at commercial organisations which want to borrow for a few months, rather than years, and don’t want to be tied into lengthy repayments. They can be over a period of weeks or months. However, they tend to charge higher interest rates than other loans so make sure you know what these are.

Peer-to-peer business loan
With a peer-to-peer loan (or a P2P), you’ll borrow money from private investors rather than a bank. You will usually be matched to these investors through an online platform. You may need to pay a fee to arrange the loan, so pay careful attention to any fees, charges and interest rates before committing.

Cash advance
A cash advance business loan (also known as merchant cash advance) allows you to borrow money against your business’ future credit or debit card sales. The amount you repay monthly will be based on a pre-agreed percentage of your card sales, so you’ll pay more when your business is doing well and less when it’s not.

Invoice finance
This is when a lender uses your unpaid invoices as security to lend to you. There are two main types of invoice financing:

Invoice factoring – you’ll be able to borrow a percentage of the value of your invoices and the lender will collect payment direct from your customers. The lender will then take its costs and you’ll be paid the remaining balance.
Invoice discounting – this allows you to borrow against the value of your invoices, but you’ll collect money from your customers and then pay your agreed fee.

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How do you decide which type of business loan to apply for?

When considering taking out a business loan and deciding which type to apply for, you’ll need to think about:

  • how much money you want to borrow
  • which loans are suitable for your business type – some loans such as Start Up Loans are only suitable for new businesses, while cash advance business loans are only suitable for businesses that generate a certain amount of revenue via card payments
  • how much you can afford to pay back each month, taking the interest rate into account
  • the length of time you’d like to take the loan out for. While it may be tempting to take a loan out over a longer length of time, you may end up paying more overall in interest
  • comparing the fees and charges with each loan you are considering.

It’s important to compare your options and to shop around before committing to an option or lender, looking at the overall costs of borrowing.

Applying for a business loan

Before you apply for a business loan, you’ll need to be clear about:

  • the amount you’d like to borrow
  • what you are borrowing the money for
  • how much you can afford to repay each month
  • how long you’ll need to repay the loan.

As with other types of loans, your business’ credit rating is likely to be checked, with more competitive loan terms generally being offered for those with a good credit score.

Some ways to improve your business’ credit score include:

  • checking your credit report and disputing any errors
  • paying bills on time
  • if you’re a limited company, filing full, rather than abbreviated, accounts to Companies House
  • making sure you have enough money in your account to cover any planned payments
  • only applying for credit when you need it. Making lots of applications suggests you are struggling financially. You could ask for a quote instead
  • keeping all of your information, such as your business address, up-to-date. Notify suppliers, as well as Companies House, of any changes
  • avoiding county court judgements (CCJ) as these are recorded on your credit report.

You may also be asked for copies of your business accounts, bank statements, details of profits and loss, tax returns, a business plan and proof of address and IDs of company directors.

Once you have gathered your documentation and have decided on the type of business loan most suitable for you, you can shop around then apply.

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Comparing business loans

When comparing loans, some important elements to check are:

  • whether you are eligible for the loan you are considering. Always check the lender’s requirements carefully before applying
  • what the interest rates are for the loan and whether they are fixed or variable. It’s worth remembering that Representative APR means that the rate, or lower, is offered to at least 51% of applicants, so 49% of applicants will likely be offered a higher rate
  • whether your loan provider offers a repayment holiday (a few months off paying). However, taking a break from paying will mean that it will take you longer overall to pay off the loan and you’ll pay more in interest in the long run
  • whether there’s an early repayment charge on the loan.

Alternatives to business loans

If you don’t think that a business loan is for you, there are other options including:

  • Business credit cards – if you are looking to borrow smaller sums, a business credit card may be suitable. You may benefit from an interest-free period on your purchases. However, always pay your balance off each month to avoid paying interest charges or fees and check what the card’s annual fee and interest rates are after any 0% period.
  • Crowdfunding – this allows you to raise investment, often by pitching your business idea online, in exchange for rewards for the investors you attract. You could sell a stake of your business through equity crowdfunding or offer a reward such as free products or tickets through reward crowdfunding.
  • Overdrafts – your business account may have an overdraft which is either interest free or a low APR. This is usually only suitable for small amounts, though, and you’ll need to check the terms of your overdraft and stick to them.

By Cathy Toogood, Jo Groves

Source: Forbes

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Keeping it in the family? SMEs divided on working with relatives

SME owners are split on whether to keep their businesses as a family affair or not, according to new research by small business lender iwoca. Just two in five (41%) SME owners say they would give a job to a family member if they asked – by contrast, nearly one in three (30%) said they would not employ a relative.

This split reflects current small business arrangements – just over half (54%) of small business owners say they do not work with family in any capacity. Of those who do work with family, one in four (26%) small business owners works with their partner and one in twelve (8%) works with their child.

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Steptoe and Son or Succession?

Those who choose not to work with family are clear on why: two in five (39%) small business owners report wanting to keep family and business life separate. One in ten (11%) say they want their family to forge their own path – indeed, more than a third (35%) of SME owners surveyed say it is unlikely that their children would join their business. Interestingly, a tenth (10%) believe their relatives can find a better career outside of their industry.

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Improving family bonds

Despite a minority of SME owners employing relatives, those who do work with family members see it as a positive. Almost two thirds (64%) of SMEs report that working with their relatives had a positive impact upon their relationships, with only a small fraction (7%) of SME owners reporting a negative impact.

Those small business owners who do work with their family cite trust as a significant positive, with a quarter (25%) saying that they trust family members to do a better job than a stranger.

Seema Desai, COO at iwoca added: “For some, working with family members could be one of the best decisions they ever make, but, of course, it won’t work for all. Try to make an objective assessment about what your family member can add that is currently lacking in your business, and whether you could both maintain the right guardrails to protect both your professional relationship and your personal one. Clear roles and responsibilities will be crucial as you look to grow and build a successful venture in the future together.”

Lottie Whyte is co-founder and CEO of MyoMaster, which she set up with her husband, Joe. She says: “I co-founded a business with my husband Joe three years ago, and for the most part it works incredibly well. There are three key reasons for this, the first is commitment – the work is all consuming and if I’d been married to someone who wasn’t in the business with me I’m pretty sure I’d be divorced by now! The second, trust, is vital and it’s great being able to start with a foundation already so strong. And finally, speed – being able to skip the pleasantries and communicate efficiently has been crucial.

“There can be drawbacks of course, from never being able to switch off from work and the constant pressure to build our global business can sometimes spill over into our personal relationship in a negative way. But overall, my husband and I already have a long history of working well together, from organising our three day wedding to managing house renovations – we know how the other one works.”

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More than 3 million of UK SMEs are unable to grow without funding

The majority of small and medium-sized enterprises (SMEs) in the UK require funding to overcome cashflow issues and pursue their growth plans, new research from Channel Capital (Channel) has found.

The UK-based, FCA-regulated asset manager commissioned a survey of 506 senior leaders within UK SMEs. It found that 59% of businesses currently need funding to ease day-to-day cashflow issues – that equates to 3.29 million SMEs, while more than two-thirds (68% or 3.80 million) need funding to grow.

There are 5.6 million SMEs in the UK, accounting for 99.9% of the business population as well as three fifths of the employment and around half of turnover in the UK private sector.

Despite the demand for an injection of capital, Channel’s research showed that SMEs are struggling to find suitable lenders. Just 51% said it is ‘easy’ or ‘very easy’ to find an SME loan.

Just over half (54%) of UK SMEs think big banks are too slow in assessing business loan applications, with 47% saying high street banks are reticent to lend to smaller businesses.

Almost two in three (65%) respondents said they are open to using alternate lenders for SME finance options, compared to 31% who said they would only trust a high street bank for a business loan.

Elsewhere, Channel’s study revealed that, of those SMEs which have applied for a business loan in the past, a fifth (20%) thought the process was ‘difficult’ or ‘very difficult’.

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Walter Gontarek, CEO of Channel, said, “From Brexit to the pandemic; the cost-of-living crisis to government fiscal U-turns, the past five years have been hugely challenging for SMEs – and financial planning is extremely difficult in the face of so much political and economic uncertainty, as our research has shown.

“Millions of SMEs need funding to soothe cashflow headaches or, crucially, to pursue growth strategies. Yet unfortunately, accessing that finance is notoriously difficult. Our study highlights the poor experience SMEs often have with big banks’ reluctance to lend, not to mention complex and time-consuming application processes with no guarantee of approval.”

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Ion Fratiloiu, CCO of Channel, added, “Accounting for three-fifths of employment and half the turnover in the UK private sector, we must better support SMEs with easier access to finance.

“The SME loan market needs to undergo the same level of disruption as consumer loans have, with technology-led and online lenders coming to the fore so borrowers can enjoy the benefits of greater choice, speed, and transparency.

“Positively, our research shows SME leaders are open to working with alternate lenders, including digital lenders, so we’re confident that improving access to finance will open up many new opportunities to these businesses.”

Source: London Loves Business

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How to make your budget stretch further as a startup

So, you’ve just launched your business and are optimistic about its prospects. You’ve got a great product, a passionate team, and some solid early traction. But there’s one problem: you’re low on cash.

Stretching your budget is going to be essential if you want to keep moving forward. Here, we’ve outlined some of the cost-saving measures that can help fledgling business owners get their venture off to a flying start.

Reduce your SaaS spend
One area where many startups unknowingly overspend is on cloud-based software, or software as a service (SaaS). While SaaS products can be excellent tools for boosting productivity and efficiency, they can also be expensive.

A report by SaaS purchasing platform Vertice found that 90% of buyers pay more than they need on software, wasting money on redundant applications, excess licenses and overpriced contracts.

However, there are some ways that you can optimise your SaaS spend without compromising on quality or functionality. For example, many tools offer a variety of features, but you may not need all of them. If you know exactly which features you need and which you do not, you may be able to negotiate a better contract by only paying for those you need.

Furthermore, some providers offer flexible pricing models that allow you to scale your subscription up or down according to your needs. This can be a great way to save money if you only require the software for a short period of time or if your business is seasonal.

Utilise your startup status
According to Harvard Business Review, startups have an untapped power often admired by investors, business founders, and customers alike. Motivated by the challenge of helping to create something new and successful, many vendors and consumers are drawn to support small businesses.

Ondeck explains that startups also often have more leverage than they realise when dealing with suppliers: “Many vendors offer simple win-win ways to make your relationships more profitable for you — and for them.” Remember, they want your business just as much as you want theirs — so don’t be afraid to ask for discounts or extended payment terms.

Furthermore, if your startup has been trading for less than 36 months, it may be eligible for a government-backed startup loan, as well as up to 12 months of mentoring. Alternatively, depending on your industry, some commercial properties are eligible for business rate cuts from local councils. There are a variety of schemes available, such as small business rate relief, if the value of your property is less than £15,000.

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Take advantage of low-cost marketing methods
Marketing on a shoestring budget can be tough, but it’s not impossible. There are plenty of creative ways to get the word out about your business without spending a fortune.

For example, make the most out of user generated content (UGC) — original, brand-specific material developed by customers and published on social media or other platforms. It can be content of any type, but usually comes in the form of images, videos, reviews, or testimonials.

By cutting through the cacophony of brands competing against each other with in-house content, UGC is favoured for its ability to capture attention, hyper–personalise the shopping experience, and increase sales.

But, best of all, creating and managing UGC is cheap, if not free. As Ucraft explains: “You do have some smart investments to make, but they will not likely reach a traditional marketing budget.” From giveaways and branded hashtags to product reviews and mentions, your startup can easily reap the rewards of this powerful and pursestring-friendly marketing tactic.

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By John Saunders

Source: London Loves Business

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Graduates accelerate SME growth across the North East

Graduates are our future business leaders.

They play an important role in supporting the health and growth of our regional economy-encouraging them to stay in the region is vital to both.

The University of Sunderland has an excellent track record in delivering programmes of support with graduate employability and retention in the region at their heart.

One such pioneering scheme is the Graduate Internship Scheme. First launched in 2011, the University of Sunderland received European Regional Development Funding (ERDF) to run its Graduate Internship Scheme, connecting graduate talent with regional, Small to Medium Enterprises. It has since provided over 650 graduates the opportunity to work in a variety of small-to-medium private sector organisations across the north-east and delivered nearly £2.4 million in funding to those businesses.

By Autumn 2022, the internship scheme will have placed 250 graduates into full-time roles within growing SMEs, earning an average salary of £20,000.

Graduates typically bring fresh ideas into those organisations, as well as a new perspective, and often help deliver a new product, process or service for the business. After 12 months, employers can decide whether to extend the intern’s contract, and most do, with a high rate of graduates being offered full-time employment on completion of their internship.

Project manager Laura Foster says: “It’s been a well-documented difficult and uncertain time for businesses over the last couple of years, and our project helps SMEs in a really practical way with help towards graduate’s salary costs”.

There are many success stories to have come out of the project and the internships team regularly receives positive feedback from SMEs and graduates who have benefited. One such example is Blaydon-based HLF Group. They recently recruited BA (Hons) Graphic Design Graduate, Brooke Gerrens.

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Director Rachel Conroy said, ‘Brooke’s appointment has had a hugely positive impact on our business. Previously we outsourced a lot of this work (Graphic Design and Media Management) which took time, and they didn’t know our products as well. I believe we can clearly demonstrate we have grown the business through the work Brooke has produced’.

‘The future is very bright. We have three very large tenders going through at the moment with multi -national companies to refurb their stock across the country. We are also seeing steady growth into new trade sectors.’

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Brooke told us of her internship experience so far, ’I have always had a creative eye, in particular editorial design which feeds into designing brochures for customers, therefore the job fits into everything I have wanted to do.

The atmosphere working at HLF is fantastic, design is something I have always had a passion for, so to have the opportunity to be creative in my career is great.’

The scheme delivers European Regional Development Funding (ERDF) and supports SMEs with the cost of employing a graduate, providing up to £3,500 in subsidy payments. After 12 months, employers can decide whether to extend the Intern’s contract.

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92% of SME leaders call on government to do more about inflation

As costs and inflation rise to record levels, small and medium-sized businesses across the UK are urgently calling for Britain’s new Prime Minister, Liz Truss, and her cabinet to provide them with more support.

A poll of 250 British SME leaders reveals an incredible 92% think the Government must do more to support small and medium sized businesses during this period of unprecedented difficulty.

The survey, commissioned by technology provider, Babble, identified the five biggest issues keeping SME leaders awake at night:

  1. Rising inflation costs impacting profit margins (58%)
  2. Retaining customers and clients (46%)
  3. Winning new business (39%)
  4. Impacts of Brexit on importing and exporting (24%)
  5. Providing exceptional customer service (22%)

SME leaders in the North West are particularly concerned with inflation pressures, with three-quarters (75%) of respondents from the region listing it among their biggest worries. Meanwhile, two thirds (65%) of business leaders in the East Midlands are losing sleep over retaining customers and clients, as SMEs struggle to compete. Delivering good customer service when the business is stretched is a particular concern for leaders in the north too, with 31% in the North West and 30% in the North East citing it as one of their biggest worries.

Following the last few years of pandemic-induced chaos, the healthcare industry (73%) is understandably one of the sectors most concerned about the impact of inflation, alongside arts and culture (78%). Investing in new technologies is another key concern for the sector, with a third (33%) of healthcare SME leaders saying so.

The impact of Brexit is still weighing heavily on small businesses too – manufacturing (50%), architecture and engineering (37%), healthcare (33%) and retail (24%) leaders each had it among their top four concerns, with worries around the effect on imports and exports.

Calls for cost-cutting support
When asked what support they’d like to see the Government provide to British SMEs, respondents overwhelmingly voted in favour of measures tackling rising costs. Over two thirds (67%) would like a cap on business energy bills, similar to household energy bills, whilst almost half (44%) want to see work done to reduce rapidly rising insurance premiums, especially on mandatory personal indemnity insurance policies. Other methods of support SME business leaders would like to see include:

• Corporation tax remaining at 19% regardless of business size (35%)
• Reintroduction of the furlough scheme through the initial recession period (27%)
• Reintroduction of the Brexit Support Fund for SMEs who are exporting to Europe (22%)
• Faster rollout of Building Digital scheme so all businesses have fast broadband (20%)

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Tech investment key to navigating trouble
With support so far unforthcoming, British SMEs are having to consider which areas they should invest in to successfully navigate this period. Over half (57%) plan to invest in new technologies to stay ahead of competition, though a quarter (23%) said they would have to scale back on spending plans. When asked, business decision makers are most likely to invest in:

• Software to improve customer experience (48%)
• Cloud technology to improve hybrid and remote working (38%)
• Increased protection from cyber attacks (31%)
• Initiatives to keep staff morale high (29%)
• Software to manage HR and recruitment processes (20%)

Commenting on the findings, Babble’s CEO, Matt Parker, says “SMEs are the backbone of the UK’s economy. But instead of being able to dream big, they are being kept awake at night worrying about how they’re going to navigate the next twelve months and it is clear they are going to need more support to do this. Whether it’s reducing costs long-term, ensuring greater customer service, stronger defences against cyber-attacks or promoting greater collaboration between teams, cloud technology provides the answer.

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“At Babble, we’re passionate about working with SME leaders to find the solutions to these issues and seeing small businesses thrive. As the country enters a new era of leadership, we’re determined to see SMEs up and down the country get the support they need and make the right investments to allow them to dream big for the future of their business.”

Babble is committed to powering business up and down the country, aiming to provide a local service to its customers, with the all the benefits of a national provider. The company supports over 10,000 organisations across a range of sectors and has over 250 staff located nationwide.

This makes Babble a natural partner for Ride Across Britain, an annual 980-mile bike ride from Land’s End to John O’Groats. As lead sponsor, Babble is demonstrating its support for clients across the UK, reflected in the cross-country route, as well as fundraising over £500,000 for charities, The Prince’s Trust and The Buffalo Foundation.

By Serena Haththotuwa

Source: Business Leader

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SME survey reveals financing drought which is stalling growth as RLS loan deadline passes

More than one in five (22%) small and medium sized enterprises (“SMEs”) that needed external finance and/or capital over the last couple of years were unable to access it.

Indeed, over a quarter (27%) have had to stop or pause an area of their business because of a lack of finance. This is according to new research commissioned by Manx Financial Group PLC (AIM:MFX), the financial services group which includes, amongst other operating subsidiaries, Conister Bank Limited (“Conister”), Conister Finance & Leasing Limited and Blue Star Business Solutions Limited.

The research showed that the biggest barriers faced by SMEs in sourcing external finance/and or capital were that it was too expensive (23%), the process took too long (19%) and that there was a lack of flexibility with repayment terms (17%). SMEs also cited other barriers such as the fact that the lender didn’t understand their business (16%) and that they received poor customer care (10%).

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The research also revealed that SMEs have been forced to pause or stop activities such as expanding into new markets, hiring the right personnel and marketing, because of lack of financing. Manufacturing, Finance & Accounting, Retail and IT & Telecoms were the sectors that were affected the most because of a lack of external finance and/ or capital.

Over the next 12 months, nearly two in five (38%) SMEs believe Sales will be the biggest areas of business that will see growth followed by recruitment (19%), new product development (18%) and new market expansion (17%).

The research also highlighted that a third (34%) of SMEs are concerned that their business will not grow in the next 12 months. However, with appropriate external finance, SMEs on average believe their business could grow by around 17%.

Douglas Grant, CEO of Manx Financial Group PLC said, “The research sadly reveals what we have been observing for some time – that SMEs continue to struggle with accessing finance and that worryingly, this lack of availability will cost them and the UK economy in terms of growth at a time when it is needed the most. The amount of growth that is being sacrificed is however significant and will require new solutions which are designed to address this funding gap.”

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On 6 April 2021 the Recovery Loan Scheme (“RLS”) was launched. A new Government-backed initiative designed to help facilitate businesses’ recovery and growth after the disruption caused by Covid-19, allowing firms of any size and sector to apply for funding of up to £10 million from accredited lenders.

Conister was approved in August 2021 as a British Business Bank accredited lender for the RLS. It enabled Conister to extend the support it has provided to SMEs throughout the Covid-19 pandemic. The scheme deadline is today (30 June) meaning capital-starved SMEs, still recovering and adapting to a post-pandemic landscape, will need to source alternative forms of lending.

Some sectors of the economy are recovering more rapidly than others. For those still struggling sectors, they require an additional government intervention, but for the remainder, no further Government intervention is necessary.

Grant added, “We were delighted to have been accredited for the RLS last year. The programme provided the necessary catalyst that many sectors required to thrive.

“However, this lifeline is now going and demand for working capital is set to soar to new highs as more businesses desperately require liquidity provisions to counteract record inflation levels, rising interest rates, supply chain issues, increases in wages and additional pandemic-induced headwinds. With the cost of borrowing set to increase, many SMEs are facing their own cost of living crisis.

“A sector focused government-backed loan scheme which brings together both traditional and alternative lenders to guarantee the future of our SMEs in struggling sectors, is critical to ensure that opportunities for their growth are not missed. We very much hope this is something that becomes a reality.

“In the meantime, all SMEs would be well-advised to take stock of their current capital structures and, if appropriate, access fixed term, fixed rate loans to prevent additional exposure to an increasingly volatile lending market.”

By Lib Finance Reporter

Source: London Loves Business