Small firms report tentative recovery
Tags: credit crunch, national insurance, ni, recession, small business, tax
Small businesses that reported being hit hard by the credit crunch ten months ago are now experiencing the beginnings of a tentative recovery, according to analysis by the Federation of Small Businesses (FSB).
The FSB have carried out research since September 2008 to document the ongoing impact of the economic downturn on small firms.
A comparison of that data suggests that the economic position of small businesses is now starting to improve after reaching a low point at the end of last year. Nearly a quarter (23%) of small businesses report that they are now experiencing an increase in trade, compared with 16% in February.
Further, the cost of finance is becoming less of a concern. By the end of last year, up to 40% of small businesses had cited the cost of finance as a big problem, but this figure has now fallen to 25%.
And it seems the these trends have in turn had a positive influence on confidence levels, with 57% stating that they were ‘quite confident’ about the future of their business. As a result, 68% of business owners are planning to grow in the next six months, with many hoping to invest in new products, more staff and marketing.
The FSB is now urging the Government to help sustain small firms by supporting apprenticeships, short-time working subsidies and increasing the thresholds before Income Tax and National Insurance contributions are payable.
John Wright, National Chairman, Federation of Small Businesses, said:
“Small businesses are naturally flexible and innovative in recessions and these figures show that despite the very many negative forces on them, they are being cautiously optimistic and are looking to expand. Although we are certainly not out of the woods yet, many small firms are seeing increased footfall and finding it easier to obtain crucial finance in the winter months, when things were at their worst so far.
“The Government must look to small businesses to build the post recession economy and help them employ more people and ease the bureaucracy and tax burdens which many still face.”
