The number of small businesses making a profit has increased sharply over the past two years, according to figures released yesterday.
The SME finance monitor, published by market research firm BDRC Continental, said that nearly 80 per cent of small businesses in the UK were profitable in the first quarter of 2015, compared with 70 per cent during the same period in 2013.
The firm also said that small businesses are now less likely to borrow from banks than they were two years ago. Around one in two businesses are now considered ‘permanent non-borrowers’, which means that they haven’t borrowed money in five years and have no plans to do so in the future.
“With the uncertainty caused by the General Election now over, it will be fascinating to see whether that appetite for loans and overdrafts or indeed other forms of finance continues to grow amongst SMEs,” said Shiona Davies, director of BDRC Continental.
The news comes on the same day that the Higher Education Funding Council for England (HEFCE) and the Enterprise Research Centre published their own data on the growth of small firms.
They said that while more people are employed by SMEs in London and the South East than anywhere else, businesses in west and south-west England are the most likely to survive. While 62 per cent of startups endure three years in Wiltshire, only 55 per cent do in the capital.
HEFCE said that the data is designed to encourage universities to collaborate with small businesses to help encourage their growth.
Professor Stephen Roper, director of the Enterprise Research Centre said: “Our universities and colleges have the potential to make a substantial difference to the competitiveness of SMEs. Universities and colleges can be a valuable source of technical and strategic information for smaller companies.”