Finance access to improve for small firms

Although the government has regularly paid lip service to the importance of growth among small to medium-sized enterprises (SMEs), times have been difficult for many companies as they struggle to access finance and deal with reduced consumer demand.

This could be set to change, however, with research from the Federation of Small Businesses (FSBs) suggesting expansion and access to funding will get easier for organisations over the course of 2014.

National chairman of the FSB John Allan pointed out that confidence has been on the up over the course of 2013, with the UK's slight economic recovery meaning conditions look likely to improve further in the coming 12 months.

"Small firms are creating more jobs and investing in their business and there are encouraging results behind the headline figures, with promising trends evident across the main areas of expansion, investment and employment.," he added.

However, he urged the government not to be complacent when it comes to helping businesses access funding and ensuring that the financial services sector offers as much help as possible to smaller firms.

"This, alongside the refocusing of Funding for Lending should continue to keep small firms in the spotlight. However a sustained recovery is perhaps some way off as the worldwide economy remains uncertain," he concluded.

Year-on-year, business confidence is on the up, increasing by 27.2 points from -5.6 in Q4 2012 to 21.6 in Q4 2013. Furthermore, this boost is not simply confined to urban areas or the south-east - every region and every industry recorded an increase in positivity.

One factor in this boost is increased access to the global market, with companies expecting to see a rapid or moderate expansion in their activity abroad over the next 12 months.

Although only 16 per cent of respondents applied for credit in the fourth quarter of 2013, rises in turnover and profitability, as well as stronger growth aspirations, mean they have been able to pay for investment with their own capital.