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FSB: Businesses feeling confident and getting more finance

POSTED: 25th March 2014
IN: Business news
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There is a tide of rising optimism in the small business community, partly as a result of the increasing willingness of lenders to provide finance, recent research suggests.

There is a tide of rising optimism in the small business community, partly as a result of the increasing willingness of lenders to provide finance, recent research suggests.

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In a report published by the Federation of Small Businesses (FSB), an index used to measure confidence among firms rose to 35.7, breaking the previous record of 33.5 set in the third quarter of 2013.

Almost two-thirds of the companies participating in the survey had expectations of growth in the next 12 months, while a quarter revealed plans to increase their business investment.

Other key findings showed that 25 per cent of small businesses anticipate an increase in export activity in the coming three months and more firms feel confident that profitability and turnover will rise in the same period.

The FSB noted that, while the lending environment remains "challenging", there has been a marked increase in the number of companies succeeding in obtaining finance, hinting that credit conditions are starting to improve.

However, many organisations still feel that credit availability and affordability are poor, according to the research, meaning there is still work to be done to restore confidence in the banks.

In a positive sign for the UK economy, 15 per cent of respondents to the FSB survey had a desire to take on more employees in the next three months, while 11 per cent had increased staff headcount in the previous quarter.

John Allan, national chairman of the FSB, said: "Once again we see confidence on the up and small firms leading the way in job creation.

"There is no doubt small businesses are pushing us further towards economic prosperity and it's so important to retain this momentum. That more than half of firms want to grow is a sign to the chancellor to keep the focus on business."

The FSB has also called on the government to give small firms the same consumer protection as domestic customers with regards to new contracts with energy, telecoms and water providers.

As it stands, smaller companies are at a disadvantage compared to their larger counterparts and ordinary consumers, the business body argued.

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