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Small and medium enterprises (SMEs) are the backbone of the UK economy. They account for 99% of private sector businesses in the UK and contribute over a third of our gross domestic product (GDP). However, despite their importance to the UK economy, many small businesses struggle to access finance - with just 6% of SMEs accessing investment funding in 2017. This article explores how important funding is for small businesses, what challenges they face when trying to access it and how they can overcome these challenges.<br>
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SME Finance: The Importance of Funding for Small Businesses By – M1Xchange.com
Introduction Small and medium enterprises (SMEs) are the backbone of the UK economy. They account for 99% of private sector businesses in the UK and contribute over a third of our gross domestic product (GDP). However, despite their importance to the UK economy, many small businesses struggle to access finance - with just 6% of SMEs accessing investment funding in 2017. This article explores how important funding is for small businesses, what challenges they face when trying to access it and how they can overcome these challenges.
The Challenges of Small Businesses • Accessing finance is difficult • Meeting regulatory requirements can be tricky, especially if you're dealing with a lot of government contracts or if you're selling to the public sector • Finding the right people to work for you is tough since there are so few qualified candidates out there (and they usually don't want to leave their current jobs) • Finding the right premises isn't easy either—finding an office space that fits your needs and budget may take a lot of time and effort • Equipment can also be difficult to find—finding equipment that's up-to-date and efficient but still affordable can be very challenging for businesses on a tight budget
How to Finance Small Businesses There are many different options available for SMEs that need funding in order to grow their business: • Bank loans - Banks offer loans with terms ranging from 1 year up to 10 years, which can help you finance any aspect of your company’s operations or expansion plan. This option is the best if you want a fixed rate of interest over the course of the loan term. You may also be required to put down collateral like real estate or stocks in order for the bank to approve your loan application; this means they will have security over assets such as property until they receive repayment on their loaned money back with interest on top!
Importance of Finance for Small Businesses Small businesses are the backbone of the economy. They are responsible for 60% of private sector turnover, 30% of private sector employment, and over half of the private sector investment. It’s no secret that small business owners face numerous financial challenges when trying to start and grow their businesses, but an often overlooked challenge is access to financing. In order for small businesses to thrive in today’s economy and create jobs, we need to ensure that they have access to finance.
The majority of SMEs are sole traders or partnerships. The majority of SMEs are sole traders or partnerships. Sole traders are individuals who run their own businesses, and this makes up around 86% of all UK businesses. Partnerships are businesses that are owned by two or more people, and these make up 14% of UK businesses. The remaining 2% of UK businesses are owned by companies. This means that only a small proportion of the UK population is actually employed by a business.
Conclusion SME Finance is critical to the growth of small businesses. It’s important that entrepreneurs have access to capital so they can take advantage of opportunities and expand their companies. By providing financing, banks can help them make key investments such as buying new equipment or hiring additional staff members.
