Growing SME numbers seek expansion despite financial access obstacles

The UK's Small Business Survey 2018 found that this has been driven by the increased ambition of the smallest businesses (micro businesses employing between one and nine people).

34% of SME employers reported growth in sales during the year compared to the year before. While one-third of micro businesses reported growth, nearly half of mediumsized businesses did so.

For the first time since the credit crunch, the government saw a drop in the proportion of SME employers who have made a profit in the last financial year, from 82% in 2017 to 76% in 2018.

SME employers continue to cite competition in the market as their greatest obstacles to success, with 45% of businesses mentioning this, followed by red tape or regulations (43%) and taxation (40%).

Brexit is a major concern in Northern Ireland – 42% of SME employers mention it, which is much higher than in the other UK nations, though in London it was also mentioned by 41%.

The report also shows that since 2010 there has been a clear downward trend in in SME employers seeking external finance, and this trend continued in 2018 with just 12% seeking this. The finance and real estate sector saw a fall from 16% seeking external finance in 2017 to just 10% in 2018.

Gabriele Sabato, CEO and Co-Founder of Wiserfunding, commented: "Accessing external finance can be tricky for SMEs at the best of times, let alone when the market is awash with Brexit uncertainty. But the real challenge for SMEs remains the inability of most lenders and investors to assess their risk profile.

"There's a clear demand for more accurate tools to assess the credit worthiness of SMEs, allowing lenders to better allocate their funds and grow assets sustainably, and SMEs to benefit from greater levels of funding."