News and Events

Business health improves

17/12/2012

The financial health of the UK’s businesses improved during the six months to October 2012, according to the latest SME Trends Index conducted by Hilton-Baird Financial Solutions.

The biannual survey, which uses a range of factors to calculate a financial score for each business, found that the overall Business Health Index increased on a six-monthly and annual basis to 0.84. This improvement was largely a result of fewer businesses reporting increases in operating costs and bad debts, with more able to increase turnover.

Although challenges still remain – 33% suggested that generating and winning new business was their primary concern for the following six months – the research suggests that conditions are improving.

However the survey’s respondents, which consist of owners and finance directors of businesses of all sizes, revealed a degree of apprehension as the New Year approaches. Just 33% expected their company to expand in the following six months, which is down from 39% in April 2012.

Interestingly, the proportion of businesses using overdrafts (37%) and bank loans (23%) fell in the six months to October 2012 on an annual and six-monthly basis as the proportion using invoice finance increased to 21%.

And the survey also found that businesses benefiting from invoice finance facilities were best equipped to secure growth. While just 40% of overall respondents increased their turnover in the six months to October 2012, 49% of invoice finance users were able to do so. Similarly, as only 29% of respondents reported an increase in profitability over the same period, this figure was as high as 38% amongst invoice finance users.

Click here to download the full report...