Optimism is returning to the SME sector after the worst of the COVID-19 pandemic, according to a survey carried out by non bank lender ScotPac.
The ScotPac SME Growth Index is the long-running research project on SME confidence. They spoke to 1253 small business owners about their feelings on growth in 2021, with 48% saying that they anticipated positive revenue growth this year.
“I’m not surprised as we’ve seen with our own clients through 2020 and into this year that they are very keen to get back to business as usual,” said ScotPac CEO Jon Sutton.
“We know small business owners are resilient, and passionate about business success, and we know that with the right government support through 2020, and the right funding in place for 2021 to replace any government support, that businesses are ready to take advantage of improved trading conditions.”
“Given the significant challenge presented by the COVID-19 pandemic, things could have been so much worse. So it is pleasing to report that the SMEs expecting positive growth are forecasting revenue to rise by eight points more for the first half of 2021 than their forecasts for the second half of 2020. This reflects a strong bounce back in revenue confidence for many businesses.”
The study showed that 36% of SME owners suggested that they may have to close their doors unless conditions improved.
“It serves as a timely reminder for these businesses to seek expert advice around longer term strategic planning and risk planning, and to secure the right funding to help them with recovery and survival,” said Sutton.
“This is good practice for any and every small business to undertake, given our research shows so few SMEs turn to the experts for advice beyond tax and compliance issues.”
The end of JobKeeper has also caused many to have less optimism within the SME sector.
“It has probably only hit the confidence of businesses that were struggling even before the pandemic,” said Sutton. “Our research showed that SME owners were reluctant to take on additional debt in 2020 during the heat of the pandemic, but as the economy recovers SMEs will need to find additional sources of working capital.”
“It is important for businesses and their brokers to look to non-bank lenders to find finance solutions that are flexible enough to meet their needs, allowing them to handle pandemic recover and take advantage of growth opportunities.”
“Securing working capital is crucial, so it is an important component for recovery that business owners and their brokers are willing to consider new styles of funding, including non-bank lending.”