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According to the manufacturer’s organisation the EEF, the availability of finance for small businesses is improving, but at an increasingly prohibitive cost. Touch Local carried out a poll amongst a sample of UK SMEs registered on our directory to find out if small business owners had experienced greater costs when seeking finance.

The Survey

As a small business owner, have you experienced greater costs when seeking finance?

The Results

Yes: 266 (49%)

No: 155 (28%)

Don’t Know: 123 (23%)

Total responses: 544

Summary

Just under half of small business respondents (49%) have experienced greater cost when seeking finance this quarter, with many unable to take our loans as a result. Others felt that bank lending had not improved at all, and were subsequently forced to look elsewhere for financial assistance. Over a quarter of respondents (28%) stated they were not experiencing higher costs when seeking finance. However, it is clear from the comments that several small business owners were looking for help from family and friends, and not professional financiers. 23% of respondents did not know their situation with regards to increasing costs, with the majority of these businesses requiring no financial assistance this quarter.

Some of the comments from the respondents:

I have not seen any improvement in the finance available to small business for us or my fellow SME businesses.

I have found big banks are willing to lend but at ridiculous cost

I am in the fortunate position of not needing to seek finance so this issue has not affected me.

High Street banks are simply not lending, in my experience. One is, therefore, at the mercy of more independent financiers, who charge exorbitant rates of interest. The banks need to make things easier for small business. If there is a good business plan, or an existing business that is clearly working, they should be open to lending. They are not.

I managed to borrow from family instead.

Being self employed, Banks and Lenders do make it difficult to get loans when in actual fact most self employed people are more secure than those employees working for a company.

We’ve had difficulty getting finance but when we have, it’s been at a higher rate of interest.

Do you have a question for UK businesses? Email kris.lea@touchlocal.com to submit your suggestion.

This week the Prime Minister blasted the civil service for loading costs and red tape regulations onto businesses. Touch Local carried out a poll amongst a sample of UK SMEs registered on our directory to find out if small business owners believed that red tape regulations are holding back growth for SME’s.

The Survey

As a small business owner, do you believe red tape regulations are holding back growth for SME’s?

The Results

Yes: 646 (80%)

No: 99 (12%)

Don’t Know: 68 (8%)

Total responses: 811

Summary

More than three quarters of small business respondents (80%) agree with the Prime Minister’s belief that businesses suffering from red tape regulations ‘frankly cannot take it any more’. The majority of these believe that the administrative cost and time spent on red tape is stifling the growth of their business, and fear that under the new Government things will not improve. Only 12% of small business owners do not believe that red tape is affecting the growth of SME’s. Of these, many note other legislations that are having a detrimental effect on small businesses, whilst others indicate that some industries such as banking rely heavily on red tape. 8% of respondents did not know whether red tape is affecting small businesses.

Some of the comments from the respondents:

Certain business sectors such as banking need much more red tape – without sufficient regulation, business will be forced to develop unsustainably and eventually crash.

You deal with more red tape than doing business.

The banks are holding us back by not spending, not the red tape.

I’m too scared to employ anyone – particularly women who may get pregnant. As a woman myself I am horrified by my response, but paying maternity leave could bankrupt my company. And employment law is such that it is practically impossible to get rid of someone who isn’t good enough. That too could destroy my company and I’m not prepared to risk something that has taken me years to build.

Whilst I am unaffected by red tape, I do know of many SME’s who are affected.

It’s not been a problem for me personally so far, but I know it is for many small businesses.

I have stayed self-employed not taken anyone on as there is too much red tape.

All the red tape and lack of assistance is stifling small businesses and growth in this country.

SME’s rarely have the manpower to trawl through legislation

I am a small business owner and I sub-contract all my work. If there was less red tape I would consider employing people directly.

Do you have a question for UK businesses? Email kris.lea@touchlocal.com to submit your suggestion.

This month the Government is publishing its second budget. Touch Local carried out a poll amongst a sample of UK SMEs registered on our directory to find out if small business owners are confident that the Chancellor will set up plans to help the economy grow.

The Survey

As a small business owner do you think the forthcoming budget will set up plans to help the economy grow?

The Results

Yes: 217 (24%)

No: 475 (53%)

Don’t Know: 212 (23%)

Total responses: 904

Summary

More than half of small business respondents (53%) are not confident in the upcoming budget announcement and the Government’s ability to drive the economy forward. Many of these business owners believe that the increase in VAT and the proposed Interest rate rise will harm the spending power of the country and leave people with less money to spend and little room in which to manoeuvre. Others believe that the Government have largely disregarded small businesses, and are not confident that the new budget will propose anything to the contrary. Less than a quarter of respondents (24%) are optimistic in the upcoming budget, with the view that the new Government is making the right strides to reinvigorate the economy. 23% of respondents were unsure whether the forthcoming budget will set up plans to help the economy grow.

Some of the comments from the respondents:

It’s difficult to see such a cut-back focus helping growth in the economy and therefore I’m not optimistic of good news in the budget for small businesses.

With so many cut backs, it is difficult to make the economy grow!

The constant change of tack breeds uncertainty. You are doing nothing to promote growth, investment, confidence and as a government lack the vision and resource to get us out of this.

Not helping small business at all!

You have to believe

Lower taxation and government expenditure

The tax on banks is a joke why not tax them the same amount as they pay in bonuses. Interest rates are at a record low try telling the banks this when trying to get a loan

The rate of interest should remain low and the Government should lobby the Bank of England to ensure that it does. The current factors that are causing the inflation rate to rise are individual items and not a trend.

I believe Osborne knows the importance of small business and the importance of getting rid of red tape and get banks lending. However what he does still depends on big business, the markets and the ‘ruling classes’. The danger is he will make great headline attracting statements, yet noting will come of them. If that happens then the country is sunk.

Do you have a question for UK businesses? Email kris.lea@touchlocal.com to submit your suggestion.

London, February 22th, 2011: Yesterday a member of the Bank of England’s interest rate-setting committee called for a raise in interest rates to help get inflation back to its 2% target. Touch Local carried out a poll amongst a sample of UK SMEs registered on our directory to find out if small business owners shared the notion that interest rates should rise to help curb inflation?

The Survey

As a small business owner, do you think interest rates should rise to help curb inflation?

The Results

Yes: 281 (28%)
No: 642 (63%)
Don’t Know: 98 (9%)

Total responses: 1021

The businesses who took the survey are all listed on http://touchlocal.com

Summary
Two-thirds of small business respondents (63%) opposed the idea of increasing interest rates, with many believing that the raise would result in a far greater cost to their business than any change in inflation. Just under a third of respondents (28%) would welcome a rise in interest rates if it led to greater control over inflation and the UK economy as a whole. A minority of business owners (9%) were unsure if they would support the change, believing that it could be imposed in the future, but no immediate adjustment should be made.

Some of the comments from the respondents:
• No rise at the moment. Inflation is the lesser evil in economics at the moment. Rise in interest rates will mean less money in the economy as people have higher mortgages etc.
• Leave well alone for the moment
• I think there are better ways to reduce inflation, like reducing fuel costs. This Government seems reluctant to do this.
• It is more important at this stage to think of the economy as a whole than to think of small businesses.
• A lot of our visitors to our caravan park are elderly and living of their savings. An interest rate increase would benefit them and subsequently us as our bookings could increase.
• The interest rates must rise!
• Raising interest rates won’t help small businesses,
• It is a way that we can help our country to recover.
• Interest rate rise will further dampen the already weak economy.
• Stability and predictability are key to recovery. Any change creates uncertainty.
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Do you have a question for UK businesses? Email kris.lea@touchlocal.com to submit your suggestion.

Prime Minister David Cameron recently re-launched his vision of a ‘Big Society’. Touch Local carried out a poll amongst a sample of UK SMEs registered on our directory to find out if small business owners understood the concept of Cameron’s ‘Big Society’.

The Survey

David Cameron has a vision of a ‘Big Society’ – do you know what ‘Big Society’ is?

The Results

Yes: 451 (43%)
No: 591 (57%)

Total responses: 1042

Summary

Despite many business respondents (43%) claiming to understand Cameron’s concept of ‘Big Society’, many believed it to be ambiguous and confusing. This notion is supported through some comments which found that many business owners’ understanding of the concept was erroneous.

The majority (57%) who took the survey did not know the Prime Minister’s key mission. These results suggest that the Government need to communicate better with SMEs over key issues if they want to obtain their understanding and buy-in.

Some of the comments from the respondents:

What is the ‘Big Society’ all about and how does it affect me?

Big Society….? No idea!

The Big Society means getting people to work for no pay.

Big Society is merely a front for government cuts and for creating a market for services.

I know what the “Big Society” is, or at least what it should be, but rarely hear it being explained in easily digestible language, which encourages those who don’t want to understand it to resort to ridicule.

It is an utterly meaningless phrase but appears to rely upon volunteers filling the void created by cuts in local authority funding.

It seems to be a way of getting volunteers to perform the services that we already pay for in taxes.

Knowing what it is is one thing. How it will work is another. Not all levels of society can be expected to participate, even if they know what it is in the first place.

Another word for Big Brother.

Issued: 15/02/2011

Do you have a question for UK businesses? Email kris.lea@touchlocal.com to submit your suggestion.

On January 4^th of this year the standard rate of VAT was increased from 17.5% to 20%. Touch Local carried out a poll amongst a sample of UK SMEs registered on our directory to find out the effect the VAT increase has had on their business one month on.

The Survey

In the month since the VAT rate increased to 20%, has it had a detrimental effect on your business?

The Results

Yes: 347 (33%)
No: 547(54%)
Don’t Know: 135 (13%)

Total responses:  1029

Summary:

Over half of small business respondents (54%) who took the survey do not believe the rise in VAT has had a detrimental effect on their business. On the whole, they have not noticed a significant change in output or profit, with a few finding that business has in fact increased in the first month of this year.

A third of respondents (33%) believe that their business has been negatively affected by the increase, with many commenting that they have been forced to increase their prices, which has resulted in customers looking for cheaper alternatives. Other business owners have attempted to absorb the rise to avoid passing the costs on to their customers, but are finding they are forced to make cutbacks to make the move financially viable.

A minority of respondents (13%) believe it is too early to comment on the impact the VAT rise has had on their business.

See below a selection of comments received from respondents: