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Financial services group Close Brothers has released its latest ‘Business Barometer.’ The study suggested that a quarter of UK small to medium sized enterprises (SMEs) are set to grow in 2016.
The UK’s economy has recorded impressive growth rates over the past few years and expansion remained robust throughout 2015. According to the BBC, the UK’s gross domestic product, the broadest quantitative measure of a nation's total economic activity, grew by 0.7% in the second quarter of 2015 and by 0.5% from July – September of this year.
The nation’s economic recovery has allowed the UK to cultivate a business-friendly climate. Figures from UHY Hacker Young, a chartered accountancy group, show that the UK has seen a 51% rise in new businesses over the past five years. Commenting on these statistics, Colin Jones, partner at UHY, said, “The UK has recovered from what were difficult economic conditions and is now a leading nation for encouraging and helping start-ups.”
The new Business Barometer from Close Brothers illustrates that economic growth will help UK SMEs expand in 2016. The quarterly survey reveals the opinions of British small business owners and senior management professionals. It found that 1.35 million SMEs (25%) are expected to grow next year, while over half of British small businesses should stay the same size.
Meanwhile, the Barometer also indicated that 54% of small businesses show confidence towards the recovery of the UK’s economy. Commenting on the release of the Barometer, Mike Randall, CEO of Close Brothers Asset Finance, was quoted by SME Insider saying: “With the UK economy continuing to strengthen, it is encouraging to see that a significant number of business leaders in small and medium sized enterprises are expecting to see their business expand throughout 2016.”
The Barometer also found that almost a third of UK-based smaller companies are planning to seek business funding in 2016. Furthermore, the poll suggested that 30% of SMEs plan to borrow as much as £100,000 and 18% will seek to obtain over £100,000 in funding. However, one in ten small businesses missed a business opportunity in the past year, due to lack of available funding.
Continuing, Randall noted: “It is vital businesses understand what assets or finance are required at all times. This is to ensure no business opportunities are missed and that they successfully manage the future needs of the business. We would urge any business owners planning to apply for investment in the New Year to ensure that they regularly assess their plans and evaluate all of the financial options available.”
The Close Brothers Business Barometer clearly indicated that a large share of UK SMEs will expand their operations in 2016. However it also showed that many small businesses plan to seek additional funding to support growth, so SMEs need to ensure they understand their financing needs at all times to expand their operations next year.
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