Fears over the Eurozone and the possibility of a double dip recession have taken growth plans off the agenda for most businesses. The continued low interest rates and the uncertainty over equities make it difficult for investors to generate a return on their capital. Investor confidence is low as the market is perceived to be very risky at present. Many businesses are either sitting on cash and waiting for an opportunity to arise or are working to reduce their debts.
Paying off debts is clearly a good priority at present. However, the smart businesses will be looking to make the most of cheap acquisitions and low interest rates. Several UK businesses have been braving the economic uncertainty to buy rivals and invest in bargains to be had. Business confidence is slowly improving and further opportunities could arise should the Euro devalue further.
Unfortunately small businesses are having to fund the bulk of their investment activities internally. Bank of England figures reveal that net lending to business fell by £9.6 billion in 2011 due to a lack of confidence in both the supply and demand sides of the market. However, for those of you with less cash to spare, the Government’s National Loan Guarantee Scheme aims to reduce the cost of loans for SME’s by 1% and should help smaller businesses. The Mayor of London has also announced a new apprenticeship scheme for small businesses who could be eligible to receive £1,500 should they participate in the scheme. Other schemes include the Government New Buy scheme in the housing sector which has been a benefit to contractors and freelancers. Keep an eye out for these schemes as every little helps and a small boost could help small businesses to expand in these difficult times.