Smaller businesses given reason for cautious optimism
In the past few years, good news has been in short supply for SMEs in the UK. However, two recent pieces of news have given small businesses a little reason to feel less uncertain about their future prospects. The first one concerned the threat of a triple-dip recession, which was avoided, while the second concerned an extension to the government’s Funding for Lending scheme.
Times have been tough for small firms, as they have been hit by problems such as stagnant consumer demand, reluctance from major banks and building societies to lend them money needed to fund growth and start-ups and rising costs of overheads like energy and communications. The fact that a third recession in the space of five years has been avoided may hint at better times ahead.
Three in a row?
Receiving just one piece of good news is enough for any business to feel a little better, but the news about the triple-dip recession being averted and Funding for Lending being extended could help to give SMEs a shot in the arm that they may have needed. For around five years, many of them have tried to swim against the tide with varying degrees of success.
The fact that a third recession didn’t happen should give SMEs more reason to look forward to the future, but with the climate as it is, could they begin to take more risks? A lot depends on there being more good news, but it’s possible that businesses could make their own by making a few savings here and there or benefitting from new business arising from this spike in positivity.
Approach with caution
Although there might be a little optimism about there being some kind of recovery in the UK’s economic fortunes, SMEs aren’t quite out of the woods yet.
The Funding for Lending scheme was created by the government to try and improve lending by banks to SMEs. A common complaint prior to the scheme’s launch was that banks were reluctant to lend, but since its inception, lending hasn’t improved as much as everyone had hoped. Fortunately, the new tweaks made should see the scheme take off and access to loans for SMEs improve.