Small and medium-sized enterprises (SMEs) have faced nearly two years of pandemic-related uncertainty. But research suggests UK SMEs are optimistic about the business opportunities in 2022 and beyond.
Half of UK SMEs are confident that demand and revenues will increase in the next six to 12 months, according to a survey of 2,000 SME owners conducted by fintech business lender MarketFinance. That figure rises to 63% when looking at the next three years.
Investment confidence is also on the rise, with 70% reporting that the current economic climate is favourable to increasing business investment over the next year.
During 2020 many businesses delayed investments due to uncertainty, including making new hires. The job market has since opened up, sparking the so-called “great resignation”
Of those looking to increase investment, 25% of SMEs said they plan to hire new staff while a similar amount expect to use funds to purchase new equipment and machinery.
As per the research, borrowing will play a key role in recovery and growth, with 62% of SMEs stating that borrowing could help them fund growth.
However, 71% of SMEs do not believe traditional banking products are the most obvious and convenient way to borrow for investment. Some 37% SMEs are looking to take on new borrowing facilities.
Many businesses are looking forward to taking advantage of opportunities in 2022. The majority of SMEs surveyed (81%) plan to invest in sustainability, while 30% say they are considering merger and acquisition (M&A) activity in the year ahead. Over 34% of businesses are already selling overseas or have plans to begin the same.
“It’s clear that the business environment has shifted and SMEs are looking ahead with a quietly confident and cautiously optimistic view,” said Anil Stocker, CEO at MarketFinance. “UK businesses intend to ramp up growth through domestic and international expansion, digital transformation and even M&A activity. But as they reset their post-pandemic goals for a post-pandemic, they’ll need to be confident of their funding base.”