Half of London’s small firms now hunt for credit
THE SHARE of small and medium sized (SME) firms in London that expect to expand in the next two years has rapidly risen since 2013, with less than a fifth of the capital’s small businesses expecting no growth.
According to research released by Albion Ventures, and seen exclusively by City A.M, 81 per cent of London’s SMEs expect to see either dramatic or moderate growth in the next 24 months. When the survey was taken last year, only 54 per cent said the same.
The capital’s small companies are also much more positive about accessing finance, with 47 per cent expecting to in the next year. Only six per cent say they have done so in the last 12 months.
London’s SMEs are more confident than the UK’s in general – less than two thirds of the equivalent outfits nationally expect to grow in the next two years. In Wales, the share is just 37 per cent. and only 33 per cent expect to access finance in the next year.
“Although the role of bank finance is diminishing it is still the largest source of capital by far and a continued focus on efficient supply and competition in this sector is vital,” said Emran Mian, director of the Social Market Foundation.
“The big question is how to enable London’s SMEs to make the most of the opportunities that they see ahead of them,” he added.
Despite the difficulties that small firms have had in accessing credit during the post-crisis years, Albion Ventures reports that regulatory barriers are still the largest barriers to growth identified by the firms.
“After spending the past few years hunkering down and trying to survive, the next 12 months will see a major increase in demand for finance as firms look to fuel their growth ambitions with fresh capital,” said Patrick Reeve, partner at Albion Ventures