Business News Round Up (15/09/2023)
SME lending flat as UK economy displays resilience
Lending to SMEs remained flat in the second quarter of 2023 as the UK economy proved “a little more resilient” than expected, according to a report from UK Finance. Its latest Business Finance Review found Gross founded that lending by the main high street banks was broadly unchanged from Q1 at £3.6bn. A quarter-on-quarter increase in gross lending to SMEs was recorded in four regions in Q2 – London, the East midlands, Scotland, and the largest at 12 per cent, the North East. Elsewhere, gross lending dropped back. The fall was particularly marked in the South East, but this followed expansion in the previous quarter. David Raw, managing director of commercial finance at UK Finance, said: “The UK economy has proved a little more resilient than some expected in the first half of 2023, with the three broad economic sectors of services, production and construction posting modest growth over the past six months. Against this stable but subdued backdrop, SMEs’ finances have remained largely unchanged. Gross lending in the most recent quarter was flat and demand for new finance continues to trend below pre-pandemic levels. In this context, it should be noted that SMEs still have a good degree of headroom in terms of cash deposits and flexibility within existing overdraft and invoice finance facilities.”
Scotland’s goods exports rise faster than UK
Scotland’s export of goods are growing at a faster rate than for the UK, according to new data that shows international trade holding up in spite of the impact of Brexit. The HMRC Regional Trade Statistics show that the value of Scotland’s goods exports increased by 12.6% to £36.7 billion in the year to the end of June. This compared with a UK-wide increase of 12.2%. Excluding oil and gas, Scotland’s goods exports rose by 13.2%, compared with a 12% growth experienced across the UK. There was strong growth in the value of drinks exports (up £829 million, 17.1%). Trade Minister Richard Lochhead said: “These figures show a strong performance for Scotland’s exports, despite these very challenging economic times. They are testament to the resilience and quality of Scottish businesses, and highlight the success of our export growth plan, which aims to increase the value of our exports to 25% of GDP by 2029. Exports boost the economy by driving growth and creating jobs. They are a key part of our National Strategy for Economic Transformation, and we continue to develop Scotland’s world class expertise in areas such as life sciences, renewables, DigiTech and food & drink, and through initiatives such as the Scottish Government’s Innovation Strategy.”
https://dailybusinessgroup.co.uk/2023/09/scotlands-goods-exports-rise-faster-than-uk/
Insolvency related activity rises by 23.2% in North West
The North West saw a 23.2% increase in insolvency-related activity during August, compared with the same month last year. New research from R3, the UK’s insolvency and restructuring trade body, from data provided by Creditsafe shows there were 409 insolvency-related activities in the region up from 332 in August 2022. Last month’s figure was the highest since March this year, when there were 476 insolvency-related activities, and the second highest since March 2022, when the number peaked at 815, coinciding with a relaxation in the rules preventing creditors pursuing debts through the courts. The figures include all insolvency-related activity including insolvency procedures and processes. Fran Henshaw, North West chair of R3 and head of corporate recovery and insolvency at Beever and Struthers, said: “The year-on-year rise in insolvency-related activity reflects the challenges facing businesses, but it is particularly worrying to see such a marked rise in August which is traditionally a quieter holiday period. Companies are facing challenges from all sides, with inflation and the rise in interest rates pushing up costs, and consumers reining in their spending due to the cost of living crisis. Even well managed businesses which were previously profitable, may not be immune to such pressures.” She added: “In the current economy it is particularly important that directors look out for warning signs like declining sales or cashflow problems.”
Government announces £1bn for 100,000 small firms
The UK government has handed £1bn out to small firms via its start up loans scheme. The programme, created to help entrepreneurs start and scale up their business has now provided the funding to over 100,000 businesses across the country. Delivered through the state-owned British Business Bank, the Start Up Loan scheme was developed and launched by the government in 2012 to help new and early-stage UK businesses without sufficient personal funds or support from friends and family to access affordable finance and mentoring support. The scheme has been particularly successful in supporting entrepreneurs from diverse backgrounds, creating a level playing field for all who wish to run their own small business in the UK. Last year, the scheme was expanded to provide finance to eligible businesses operating for up to 5 years to support their growth. Small Business Minister Kevin Hollinrake said: “We’re delivering on the Prime Minister’s priority to grow the economy and make the UK the best place in the world to start and scale up a business. “Across all four nations and every region of the UK, we’ve supported exciting entrepreneurs through one billion pounds of government backed loans, and I want to see even more innovators reach their potential.”
https://bdaily.co.uk/articles/2023/09/13/government-announces-1bn-for-100000-small-firms