For five years, the UK’s economy has been down in the dumps. Two recessions, rising unemployment, rising inflation and stagnant consumer demand have all added up to a climate in which it has proven very difficult to run a successful small business. Fortunately, businesses have received a couple of pieces of good news that may lead to a path out of the current slump. In this post I outline some small business investment options.
Third time lucky?
At the start of the year, the threat of a ‘triple-dip’ recession, which would have seen the UK economy contract for the third time in less than five years, seemed very real. Thankfully such a nightmarish scenario was avoided, as modest growth was recorded in the early months of 2013, but the economy isn’t out of the woods just yet.
Growth at present is barely registering, but it’s there, and the fact that a third recession didn’t happen is as good a reason as any for businesses to think that something good might be around the corner. There are other reasons why small firms in particular might feel optimistic about the climate becoming a little bit less gloomy.
A new scheme was recently launched by the government to try and stimulate lending by banks and building societies to SMEs. Until recently, one of the most common complaints that small businesses had was about lenders being reluctant to provide loans to businesses looking to progress, even if they’re not actually that risky.
The Investment Programme, estimated to be worth around £300m, was created by Business Secretary Vince Cable, who has been behind a number of other initiatives designed to make it easier for SMEs to get access to much-needed funds. Mr Cable has also taken a leading role in establishing a new business bank aimed specifically at trying to make it easier for SMEs to get low-interest loans.
How to seize the moment
If you run an SME and wonder what you can do to try and move forward, the guys at financial-chaos.com have a few tips for you. They are:
- Take advantage of schemes like the Investment Programme. They’re there to help, and could help your start-up get off the ground almost straight away.
- Don’t be afraid to take risks – spend a little on something like improved office space or a new, improved website. This could help to bring more money in later on.
- Don’t be too cautious – if the economy picks up again and your SME is still being austere, then it could spell disaster, as you might not be well-placed to expand your business.