One in three smaller British companies (34 per cent) count on entry to funding to turn into tougher following the UK’s departure from the European Union.
Solely three per cent count on discovering finance to turn into simpler, in keeping with the British Enterprise Financial institution’s newest Small Enterprise Finance Markets report.
And smaller companies are gloomier concerning the prospects for enterprise, with 29 per cent in 2018 anticipating Brexit to have a destructive impression, up from 22 per cent in 2017.
General, demand for exterior finance has continued to fall, with simply 36 per cent of smaller companies utilizing exterior finance in 2018 (versus 44 per cent in 2012).
But regardless of Brexit uncertainty, half of smaller companies aspire to develop over the following 12 months.
The overall quantity of financial institution lending obtainable was static at £166 billion and gross financial institution lending – which makes up the most important proportion of enterprise finance – averaged £14.four billion per quarter. Repayments totalled £14.three billion per quarter, so banks lent fractionally greater than was repaid.
The expansion of options to financial institution finance has continued, albeit at a slower tempo. Asset finance grew simply three per cent in 2018, in contrast with 10 per cent in 2017; peer-to-peer enterprise lending grew by 18 per cent, in contrast with 51 per cent progress in 2017.
Consciousness of finance choices outdoors of conventional lending has additionally continued to develop, with over half of smaller companies (52 per cent) conscious of peer-to-peer lending (up from 47 per cent in 2017); 70 per cent conscious of crowdfunding (60 per cent in 2017); and 69 per cent conscious of enterprise capital (62 per cent in 2017).
The quantity of fairness taken in smaller UK companies rose by 4 per cent (in contrast with a 79 per cent rise the earlier yr), but the variety of fairness offers fell by six per cent — the rise in worth being pushed by bigger deal sizes.
The report means that some smaller companies are delaying long run funding and growth selections forward of Brexit and decreasing their demand for exterior finance, whereas others look like utilizing exterior finance to place in place shorter time period contingency plans.
Keith Morgan, British Enterprise Financial institution CEO, mentioned: “It’s clear insecurity is affecting many smaller companies, as evidenced by a unbroken drop in demand for exterior finance. It’s, nonetheless, encouraging to see that half nonetheless aspire to develop and that there’s elevated consciousness of a broader vary of finance choices. This will probably be an necessary think about making certain that smaller companies are higher positioned to make the precise finance decisions as uncertainty diminishes and confidence returns.”