Venture and growth capital investor Albion has commissioned an independent survey of 450 British Small- to Medium-sized Enterprises (SMEs) with aggregate turnover of £1.6bn and employing over 20,000 staff. Encouragingly, over 60% are anticipating growth over the next 24 months and, contrary to public opinion, a lack of access to funding ranked low in their agendas. The survey suggests that growth-minded entrepreneurs are more pre-occupied with accessing management and sales talent and accessing new export markets than chasing the banks for loans or complaining about government red tape.
The pursuit of growth is also reflected in a willingness among expansion-minded SME owners to embrace external equity capital as a means to achieving this end: the Albion report suggest that 1 in 8 SMEs across the UK are willing to part with equity in return for a step-up and, in the South East, 1 in 4. 20% of SMEs with turnover of £20m or more are open to giving up equity in return for external support to grow.
Despite the wall of bad publicity about UK banks’ unwillingness to lend to SMEs over the last five years, a lack of availability of funding ranked outside owners’ top three concerns. However, it is not all good news. Of the SMEs that have tried to raise finance over the last year, nearly one third wanted it just to stay in business. By comparison, 28% were looking for long term capital.
Much has been made of the current Government’s enthusiastic support for an export-led recovery. While hesitating to give the Government the credit, 53% of the companies surveyed reported that they had entered new markets in the last 2 years and 73% of them claim to have faced no difficulties in doing so.
While wary of giving too much credence to any one survey (but acknowledging that Albion have been one of the most successful growth investors in the UK), the results reinforce what the Livingstone team have been seeing among our SME clients every day of the last three years: determined entrepreneurs tenaciously pursuing growth and making their own luck – and turning to us for advice when an independent, expert opinion and our contacts among the growth capital and debt communities can help expedite their ambitions.
Click here to download the survey.