London SMEs report encouraging signs of growth | London business news
As the pandemic progressed, small and medium-sized businesses across London have shown tremendous resilience despite extremely challenging circumstances. They have repeatedly adapted to changing lockdown restrictions, changing their business models or, in some cases, their entire supply chains to meet customer needs and serve their communities.
To understand what SMEs are thinking, an independent research firm (BVA BDRC) spoke to nearly 18,000 of these companies across the UK and its findings are included in the SME Finance Monitor’s latest annual report for 2020.
Overall, it found that 75% of SMEs in London had a profit in the last 12 months, which was in line with the UK national average.
The survey also found that 44% of London SMEs reported having been innovative, which is in line with the UK national average, including 19% who reported having developed a new product or service.
The overall level of SME innovation was the highest percentage ever recorded in the SME Finance Monitor and shows how the pandemic has resulted in companies making difficult, but hopefully long-term, beneficial decisions.
As the economy begins to open up further, many companies seek beyond survival to find ways to thrive in the months and years to come. Around half of the SMEs in London said they want to grow in the coming year, and more than a fifth are planning growth of 20 percent or more.
SMEs in London were more likely to have ambitions to become significantly larger and to be among the most risk-takers in order to be successful. As a result, they are more likely to agree that they were happy to borrow to grow and applied for funding based on a need.
Companies across the country looking to grow said they were either hiring more staff, developing a new product or service, or investing in new equipment, machinery or premises. These are encouraging signs as SMEs are the lifeblood of many local communities.
Over the past year, more than 80% of SMEs that have applied for funding to finance their growth have successfully obtained it. In addition, the banking and finance industry has provided nearly £ 80 billion in loans through the various government-backed loan programs, including £ 16.3 billion to companies in London. With some of the government subsidy programs running out, the industry is poised to provide SMEs with access to finance to support them and fuel the ongoing economic recovery.