• Tue. Jun 25th, 2024

North East Connected

Hopping Across The North East From Hub To Hub

Business Ramping Up in The Midlands as SMEs Actively Seek Future Funding

Business Ramping Up in The Midlands as SMEs Actively Seek Future Funding

  • SME look for average of £170,000 to finance growth
  • 45% of Midlands SMEs set to apply for funding in the next year

(October, 2021) Small businesses across the Midlands appear not only to be recovering but positively expanding, according to new data from specialist SME bank Allica. The bank reports that 45% of the 128 Midlands SMEs it surveyed are set to apply for funding to fuel expansion and diversification in the remainder of 2021 and into Q1 of 2022.

After an unprecedented year of downturn in 2020, businesses in the area have rebounded well as trade returns to pre-covid levels. Across the board, the average amount of funding business owners are applying for in the Midlands now stands at £170,617 – a considerable amount when compared to an average of £94,116 in 2017.1

The reasons behind businesses seeking extra finance also highlights a growing trend of expansion: over a third (37%) are borrowing to fund new equipment, with another 18% looking to use funding to buy or upgrade their premises. This compares to just 13% of SMEs borrowing to assist with cash flow.

Allica Bank’s research also revealed investment in areas that would traditionally be cut during times of economic downturn. Recruitment was cited by 18% of businesses as a cause for applying for funding, while sales and marketing accounted for 15%.

The pandemic has also created greater opportunity for expansion across The Midlands, with 45% of SMEs saying they have seen more corporate premises come available, with 50% believing this will enable them to expand quicker and secure better deals on business and rental rates.

On the other hand, however, there is a significant number of businesses struggling to secure funding from their banks. Well over half (58%) have recently been rejected for funding, leading to 32% believing they will require a combination of lenders to meet their funding requirements within the next 12 months.

Nargis Quraishi, Central Relationship Manager for the Midlands at Allica Bank, says the figures paint a picture of a healthy SME market: “Combined, the East and West Midlands is the biggest region within the UK, making it an excellent barometer for SME recovery. While there are still some challenges, this appetite for expansion, in the wake of such a significant impact on trading last year, shows that not only are Britain’s SMEs resilient, but they’re essential for the UK’s economy.

“The Midlands lost a significant number of businesses in 2020 – something we must do our utmost to avoid again in 2021/22 – and it continues to be a nervous time for business owners this year, too. However, I think now we can confidentially say the sector is leading the charge for economic recovery. We just have to make sure the banks do their bit to ensure no one falls through the gaps!

Related Post