According to research by accountancy firm Shelley Stock Hutter, respondents have little faith in initiatives such as the Seed Enterprise Investment Scheme and the National Insurance holiday launched by the government.
Meanwhile, just one in ten small business owners believe the government’s plans to launch a state-backed bank in 2014 will directly help their business, with six in ten adamant it will not and a further three in ten undecided.
Under a quarter of small business owners (24 per cent) understand the benefits of the Enterprise Finance Guarantee Scheme while just over a tenth have any knowledge on the National Insurance Holiday scheme.
Bobby Lane, partner at Shelley Stock Hutter says, ‘I’m not surprised that there is little or no understanding about the recent initiatives introduced by the government. There have been a number of initiatives introduced for small businesses, but little supporting information or an education campaign to follow this up. As a result many small businesses are at sea as to how their business will gain and what steps have to be taken to benefit from the schemes.
‘The Enterprise Finance Guarantee Scheme has been a great help to some businesses, yet the scheme has received a lot of negative publicity over the past two years. If businesses were made aware of how to access the funding and go about it in the right way, then there would be more successful applications.’
Lane adds that, for many businesses, this could mean the difference between survival and growth. ‘The answer is not to saturate the SME marketplace with more initiatives but to make a concerted effort to provide more detailed information on existing schemes, the best way to access them along with the most appropriate way to finance their business.’
A third of SMEs (31 per cent) will expect to fund their working capital in 2013 through more traditional routes such as a bank loan or via a bank overdraft. One in ten expects to look to invoice discounting or factoring, and the same number will be looking to a private equity firm or investment from a business angel.
In contrast, four in ten businesses do not envisage needing any extra funds for the foreseeable future.
