While there are still worries about the pandemic and a range of economic and trade issues, the majority of small and medium-sized businesses believe it is urgent to start building again after the crisis now.
They are ready to step up business investment, with ambitious plans in terms of recruitment, renewal of equipment and machinery, and expansion both domestically and internationally. Fintech business lending company MarketFinance asked 2,000 SME owners across the UK about their outlook for 2022 and beyond, assessing short- and long-term plans for business investment and growth.
Confidence
Analysis of the survey results shows that business confidence among SMEs is improving, with many businesses now focusing on recovery and growth. With the pandemic disruption now largely resolved, half of SMEs (48%) expect their revenue to be stable or increase over the next 12 months. Similarly, 50% of SMEs expect demand for their product or service to stabilize or increase over the next six months. MarketFinance research has found that the majority of SMEs (63%) expect their business to grow over the next three years.
Investment
With a survival regime no longer a necessity and cash flow pressures starting to ease, the vast majority of SMEs now feel confident enough to increase business investment over the next 12 months. A quarter of SMEs plan to hire new employees, while 24% plan to purchase new equipment and machinery. When asked how they factored the loan into their investment plan, 23% of SMEs said access to more loan options could help them boost their investment further. .
Get a loan
Research results demonstrate that borrowing will play an important role in recovery and growth with 62% of SMEs saying prudent borrowing can help them raise capital. However, three-quarters of SMEs do not believe that traditional banking products are the most obvious and convenient way to borrow for investment. Despite the lack of linkage between current financing needs and the options available through traditional avenues, more than a third of SMEs are looking to access new borrowing vehicles.
Evolution
With high confidence and a feeling of having moved out of recovery and into a new growth phase, many businesses are looking forward to seizing many opportunities in 2022. Almost all SMEs All surveyed plan to invest in sustainability, while 30% say they are considering mergers and acquisitions (M&A) in the next year – more than twice as many as those that focus mainly on sustainability. focus on organic growth. More than a third of businesses said they have sold abroad or plan to start doing so. This figure is the highest among the largest businesses surveyed (revenues between £5m and £6.5m) but even among smaller businesses a significant number is concentrated in export.
Anil Stocker, Managing Director at MarketFinance, commented: “It is clear that the business environment has changed and SMEs are quietly looking ahead with a confident and cautious stance. UK businesses intend to accelerate growth through domestic and international expansion, digital transformation and even M&A. But as they reset their post-pandemic goals for post-pandemic, they will need to be confident in their funding base.
Given how many SMEs are looking for financing beyond traditional pathways, we are particularly proud to have been recognized by the British Corporate Bank as one of the few alternative providers under the Scheme. Recovery Loan. Plans like the RLS are a golden opportunity for SMEs looking to prepare for growth, providing easily accessible capital at a lower cost across a wide range of products. We expect to see a large number of SMEs take advantage of this program over the next 6 months as their growth and expansion efforts gain momentum and they invest in ambitious plans for 2022 and beyond. so more. ”
