Accessing finance

SME Investment Report

05 August 2016
2 minutes read

Adam Little

A lot has happened in the financial landscape this year, most recently as a result of the announcements in the 2016 Budget, the new National Living Wage and, of course, Brexit. With a great deal of change affecting small to medium businesses in these uncertain times, we wanted to know if – and how – SMEs are planning to invest in their businesses in 2016 and beyond. It was good news – our survey of over 300 SMEs found that a healthy 68% of respondents are planning to take out business finance in the next 12 months to expand their business, purchase new equipment and more.

What we found

The UK’s alternative finance market saw exponential growth in 2015. Our survey discovered that alternative finance now holds almost half the market potential with 46% of SMEs taking advantage of it, while bank loans have become the least-used form of finance (15%). From peer-to-peer lending and angel investments to a cash advance, see our guide to alternative finance here. With alternative finance making it easier than ever to support your small business, what exactly do SMEs want business funding for?

Pubs

Pubs account for around a fifth of those seeking to borrow between £10,000 and £20,000. Besides nearly half of pubs wanting to expand their business (48%), other owners most often want to refurbish (42%), most likely to go towards updating their décor and menus.

Restaurants

15% of respondents will be looking to borrow £20,000-£30,000, a quarter of which are restaurants. As restaurants often use their cash injections to refurbish (41%), this would suggest that this sector undertakes larger projects than pubs to keep up with interior design trends, but not to the same scale as other sectors we surveyed, such as hotels and B&Bs.

Hotels and B&Bs

The hotel and B&B industry makes up almost a quarter of the 8% of SMEs who are looking to borrow a much higher sum of over £100,000 (24%). Rolling out upgrades to a number of bedrooms could account for the significantly larger loan amounts sought by this sector.

Salons and other beauty businesses

Meanwhile, salons and other beauty businesses most often want to use business finance to purchase new equipment (56%), as do chemists, opticians and dentists (64%). As customer-facing sectors with tools that are used frequently over long periods of time – not to mention technological advances – these businesses will be looking to keep their assets from becoming worn out or outdated.

The best times to take out finance

While May 2016 was a popular month for taking out an extra cash boost (15%), we can expect the next peak this coming September when 15% of businesses start to ramp up their activity ahead of the Christmas rush. Pubs, restaurants and salon and other beauty businesses are most likely to seek finance during this time (19%, 13% and 16% respectively), with the surge in Christmas parties bringing extra staff and stock costs for these customer-facing businesses.

 The full indepth report is available to download for free here.

Next Steps

Liberis finance have won Alternative Lender of the Year for 2 years running. Find out more about what we do.

Find out more

Recommended Articles

Accessing finance

Five Finance Options For Self-Employed And Sole Traders

02 March 2020
3 minute read

Being self-employed or a sole trader boasts many benefits including more freedom, higher earning potential and getting to start something of your own from scratch. However, financially it can be tough, especially in the beginning. Luckily, there are now a lot more financing options and support networks out there to assist you in getting your business off the ground. When it comes to getting financing, we've put together a list of options to help you get started...

Accessing finance

Everything You Need to Know About GoCardless

02 January 2020
3 minute read

These days, technology is everywhere. And as it advances, we are seeing more and more intelligent solutions for businesses, helping to cut down resources and simplify processes. With this in mind, we’re going to take a look at GoCardless – an online tool that enables businesses to collect recurring payments from their customers around the world into a single bank account.

Accessing finance

Five Types of Loans for Sole Traders

16 December 2019
3 minute read

As a sole trader, it’s more than likely that you’ll need to take out a loan at some point. However, this prospect can be daunting and you may assume that there are only limited options available to you. But nowadays there are several different ways that you can get funding. The key here is making sure you do your research so that you can find a lender that suits your background and circumstances.