LONDON (Reuters) - More than half of Britain’s smaller companies expect to grow in the coming year, a survey published on Thursday found, showing optimism on the recovery spreading throughout the economy.
Fifty-one percent of small and medium-sized companies (SMEs) expect to grow over the next 12 months, up from 48 percent in the previous quarter, the SME Finance Monitor said, the highest proportion since the survey began in 2011.
The British government sees growth in the SME sector as important in boosting the wider economy and has tried to promote lending to small businesses. Last month data from the Bank of England showed lending to SMEs grew at its fastest pace on record in June.
The Finance Monitor, carried out by BDRC Continental, found 44 percent of the 5,000 businesses surveyed in the second quarter said they had grown over the last year, an increase from 39 percent in the first three months of 2013.
The survey also found 44 percent of SMEs had accessed external finance in the second quarter, up from 39 percent in the previous three months, driven by businesses turning to a wider variety of financing sources as the use of core bank products such as loans, overdrafts and credit cards remained flat.
While the economic climate continued to be considered the biggest obstacle to running a business over the next 12 months, BDRC said the number of firms citing this barrier was shrinking each quarter and had fallen to its lowest level to date.
The use of external finance remained hampered by firms’ lack of confidence that a bank would agree to their request. While 91 percent of renewal requests were accepted, only 38 percent of businesses felt confident about future applications.
For new financing, only a quarter of firms were confident of being accepted despite an actual success rate of 50 percent.
The survey was commissioned by the Business Finance Taskforce, which was set up by the UK’s six largest banks following a government report into private sector finance.
(The survey's full findings are available at www.sme-finance-monitor.co.uk/)
Editing by David Holmes