North East SMES must make positive investment decisions now to fully capitalise in the coming years, a new report from HSBC Commercial Bank has suggested.
The Ambitious Businesses report shows that two thirds (67%) of small and medium-sized businesses in the region are actively planning for growth this year, and that 52% of business leaders are confident in the current economic climate, up from 34% at the same time last year.
However, a third of businesses (33%) in the region still believe it is too risky to make significant investments at this time.
Nationally, the report highlights how improving conditions are boosting SME revenues across the country by an average of £30,000 for each micro-business to date this year, £80,000 for each small firm and nearly £440,000 for each medium-sized business.
It warns those businesses that are not planning for growth or making any significant growth investment this year that now is not the time to sit still.
Two fifths (43%) of businesses in the North East said that as the economy has improved, competition has heated up, while 40% said that if they do not continue – or begin – to invest in growth in the second half of the year, they risk falling behind the market.
Tyne & Tees area commercial director at HSBC, Pat Dellow, said: “The findings of the report mirror what we’re seeing in North East.
“We’re experiencing an increase in our lending and the quality of lending proposals we’re receiving highlight that businesses are viewing the future with real optimism.
“Companies are increasingly requesting our support with access finance for plant and machinery, purchase of premises and investment in stock, demonstrating that confidence has definitely returned.
“With the indicators all looking positive, now is the time to invest in growth and I’d encourage SMEs in the North East to find out what support is available to them.”
As part of its £6bn SME Fund, HSBC recently allocated £100m of new lending to the North East to help businesses achieve their growth ambitions.
Amanda Murphy, Head of Business Banking for the group, said: “There is still a sizeable minority of businesses that are understandably cautious about the recovery and reluctant to make significant investments now.
“These firms risk falling behind their more ambitious peers, and we want to do all we can to help and support them in finding the right solution for their businesses.
“We have made available £6bn of new lending to SMEs in 2014, and are also running events up and down the country to help get companies over the application barrier and into a position where they have the right type of funding to fuel their growth ambitions.”