British small firms ‘drawing strength’ from overseas market

Due to weak domestic demand, small and medium-sized enterprises (SMEs) in the UK are drawing strength from overseas markets, according to the latest Business in Britain report from Lloyds TSB.

John Maltby, managing director of Lloyds TSB Commercial said: "Business confidence is on the turn. After such dramatic lows, this revival is a real sign that businesses are genuinely hopeful for the future, and it is clear that many firms now see better sales and profitability on the horizon.

"But it remains a confidence tinged with caution. Concerns about home-grown demand are unsurprisingly weighing on the minds of business owners whose success depends on domestic markets."

He said that while SMEs continue to "harbour doubts" about the current economic climate, they will be less willing to spend on investments, thus hindering recovery.

Recent data from the Department for Business, Innovation and Skills has revealed that lending to small firms under the flagship financial support scheme for SMEs – the Enterprise Finance Guarantee – has fallen by 60 per cent.

Posted by Nicola Richards