Three quarters of SMEs are more confident about their prospects in 2014 than the previous 12 months, but less than a quarter are looking for external funds to finance their growth plans, according to a survey say Harris & Co accountants Northampton.
Iain Moffatt Head of Regions at KPMG said: ‘Nearly half of businesses are not willing to take on any risk associated with external finance and leverage their business, despite the reported optimism levels. This is an indication that companies are still very uncertain about the banking market, which some view as being unsupportive to small businesses during the recession.’
A fifth of respondents said international expansion would be the most critical element in moving their growth agenda forward. However, KPMG cautioned that some were at risk of overtrading, pointing out that a third (32%) said they measured growth by increase in revenue which could see businesses take on more orders than their cash resources can fulfill as the economy improves.
Moffatt said: ‘With the prospects of better conditions returning the outlook will be brighter but there is a need to keep close control on cash, accurate cashflow forecasting and the need for continued monitoring of the cost base.’