Small firms across the south east are showing increasing optimism for 2014 as businesses remain positive about the economic outlook. Latest research from FSB suggests small firms want to grow their business and find access to finance a little easier.
For the fourth consecutive quarter, the FSB Small Business Index measure of confidence among small firms has grown year-on-year, up 27.2 points from -5.6 in Q4 2012 to +21.6 in Q4 2013. Encouragingly, this optimism is also replicated in every region of the UK and in each business sector.
This increased confidence means more small firms are planning to invest in and explore the global trade market. This new data shows businesses expect to see rapid or moderate expansion in the next 12 months. Alongside this, one in 10 businesses report running above capacity while a third are running at full capacity – both the highest figures since the FSB Small Business Index began in 2010.
Encouragingly, the number of firms refused their credit application is the joint lowest share since the start of 2012. While only 16 per cent of respondents had applied for credit in the quarter, reported rises in turnover and profitability, as well as stronger growth aspirations, means businesses could be paying for investment out of existing sources of capital.
Those businesses accepted for finance continue to report cheaper interest rates being charged, a direct result of Funding for Lending (FLS). At the Centre for Micro Business we hope the re-allocation of FLS funds to SME lending will mean the banks make finance available to more small firms.
Confidence has been in positive territory for a full year, giving economic growth solid foundations moving into 2014. Small firms in Kent are creating more jobs and investing in their business and there are encouraging results behind the headline figures, with promising trends evident across the main areas of expansion, investment and employment.
Here in Kent we are feeing increasingly buoyant in general outlook but there is an underlying sense of caution that for the very micro sector there is still very much a sense of the knifedge and no room for easing up. Real issues such as cashflow and the increasing on costs of rates and energy coupled with the access to retail centres for motorists are still with us. Local Authorities are playing their part in encouraging the economy but Government must ensure the underlying economy supports this trend.
If you need help developing your business, finding finance, expanding into new markets or just a friend to help mentor you then please get in touch.