Small businesses crucial to economy according to new reports

IN: Business news

Two pieces of research regarding SMEs grabbed our attention at Aldermore this morning. The first, figures from the Department for Business, Innovation and Skills, showed that the number of private sector businesses in the UK had increased by 300,000 over 2011-2012.

The second report, from the University of Surrey and Kingston Smith, discovered that SMEs provided 59.1 per cent of private sector jobs.

Both reports highlight the importance of the small and medium business industry to the UK economy. Further statistics from the Department for Business Innovation and Skills report discovered 99.9 per cent of the 4.8 million private sector businesses were SMEs.

Business Minister Michael Fallon, who is set to appear at this Friday's Festival of Business conference, said:

"Today's figures show that we now have a record number of private sector businesses in the UK. We have always said that private sector is central to healing and rebalancing our economy and this increase is another encouraging sign.

"We know that our entrepreneurs drive growth, so we will continue to do everything we can to help unleash and unlock entrepreneurs' potential. The additional tax relief for angel investment, reforms to employment law, investment in business mentoring and further cuts in red tape are just some of the actions government is taking to create a better business environment."

Meanwhile, a report from the University of Surrey and Kingston Smith also highlighted the challenges and opportunities for SMEs in the United Kingdom. The report reviewed the potential for small and medium businesses in 2012. It also investigated the current methods of finance for successful SMEs, discovering that companies were more likely to use more than one source of funding.

Indeed, the document highlighted that SMEs with a relatively large number of employees were significantly more likely to have initially funded the business using a bank loan or factoring and invoice discounting. However, the report also revealed that newer businesses were more likely to avoid financing through traditional banks, with the attitudes towards the larger institutions ranging from disappointment to contempt.

It's time to give SMEs the support they need and deserve. It's time to shake up British banking.  

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