Small businesses in the UK are showing increasingly high levels of optimism as the March 2013 Budget looms, according to the Federation of Small Businesses (FSB).
The organisation’s first quarter Voice of Small Business Index has indicated that confidence has grown, but it is not all good news. The survey of 2,686 people also revealed that investment intentions have fallen, thanks to poor availability of finance and a tepid domestic economy.
FSB’s index increased from a negative reading of -5.6 in quarter four 2012 to a positive 6.3 in quarter one of 2013.
"It is great news that confidence is beginning to edge up and is back in positive territory. This bodes well for GDP figures for Q1 and we would expect them to be better than the -0.3 per cent recorded in Q4 2012," said John Walker, national chairman of the FSB.
Yet, the number expecting their business to grow has fallen from 56 per cent in the first quarter of 2012 to 54 per cent now.
It also found that fewer small businesses in Britain are heading to high street banks to get finance, which is something the FSB believes chancellor George Osbourne should address in his Budget on March 20th.
The overall number of firms applying for finance fell to 20 per cent in the first quarter of 2013, down from 23 per cent at the same time last year. Furthermore, only 41 per cent had their applications for cash accepted, which is down from 44.5 per cent year-on-year.
“This is something which must be addressed at the Budget. A clear plan for the Business Bank must be put in place to increase help ease access to finance and to boost competition in the sector,” Mr Walker added.
The FSB has said that the Business Bank should have a core focus on micro-business finance, long-term and high-risk loan applications and advice. As a result, it should offer increased competition in the market and promote the use of non-bank finance among small firms.