Post-pandemic business confidence grows

The survey reveals that half of SMEs ( 48%) expect their turnover to stabilise or increase over the next 12 months; similarly, 50% expect demand for their products or services to stabilise or increase over the next six months and the majority ( 63%) predict their business will grow over the next three years.

The research findings are based on a survey of 2,000 UK companies with a minimum turnover of £100,000 conducted for MarketFinance in November by LMRMC Research, a Market Research Society-approved partner.

The vast majority of SMEs ( 70%) now feel confident enough to increase business investment over the next 12 months, according to the survey.

The research also found that a quarter of SMEs plan to hire new staff, while 24% expect to purchase new equipment and machinery. When asked how they were factoring borrowing into their investment plans, 23% said access to a broader range of borrowing options could enable them to increase investment even further.

Some 62% of SMEs say that prudent borrowing could help them fund growth; however, three-quarters ( 71%) do not believe traditional banking products are the most obvious and convenient way to borrow for investment. Despite this lack of alignment between current finance needs and the options available through traditional routes, more than a third ( 37%) are looking to take on new borrowing facilities.

More than four in five SMEs surveyed ( 81%) plan to invest in sustainability, while 30% said they are considering merger and acquisition activity in the year ahead  – more than twice as many as those primarily focusing on organic growth ( 14%). 

Anil Stocker, chief executive at MarketFinance, commented: “It’s clear that the business environment has shifted and SMEs are looking ahead with a quietly confident and cautiously optimistic view. UK businesses intend to ramp up growth through domestic and international expansion, digital transformation and even merger and acquisition activity. But as they reset their post-pandemic goals, they’ll need to be confident of their funding base.”