FSB: Small businesses increasingly optimistic

IN: Business news

The Federation of Small Businesses (FSB) has claimed small firms are broadly optimistic ahead of the chancellor's budget on March 20th.

undefinedA survey of 2,686 business bosses carried out in the first quarter of 2013 revealed confidence had moved from a negative reading of -5.6 in the final three months of 2012 to +6.3 at the beginning of this year.

While this marks positive news for small and medium-sized enterprises (SMEs), the FSB also found 54 per cent of companies expect to grow in 2013 - down from 56 per cent at the same time last year.

The Bank of England's quarterly report on the Funding for Lending Scheme (FLS) which was released on 4 March, highlighted that many of the more traditional high street banks were not embracing the Scheme. However, the newer entrants were actively lending, such as Aldermore Bank which had net lending of 228m in Q3 and 251m in Q4, making it the sixth largest lender.

One issue the FSB raised was the fact fewer small firms are applying for finance from banks, which is a problem the organisation wants brought up in the budget.

National chairman of the FSB John Walker said: "Two separate reports last week showed that lending to small firms remains constrained. This is something which must be addressed at the budget.

"A clear plan for the Business Bank must be put in place to help ease access to finance and to boost competition in the sector, both through encouraging non-bank lenders such as peer-to-peer lenders to join the market and though new 'challenger' banks entering the arena."

As a challenger bank, Aldermore has a range of lending options for small firms, including the government-backed FLS, as well as asset finance, hire purchase and lease finance.

The FSB pointed to the success of the FLS, which has helped to ensure 38.6 per cent of small firms have secured interest rates of less than four per cent on the credit they were offered.

Other findings from the report included small businesses planning to increase their staffing levels marginally in the coming quarter, as well as fuel and utilities continuing to drive business costs for SMEs.  

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