News and Events

Business health improves


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...