During the course of the pandemic, small and medium sized businesses across London have showed tremendous resilience despite facing extremely challenging circumstances. They have repeatedly adjusted to changing lockdown restrictions, altering their business models or in some cases their entire supply chains to meet customer needs and serve their communities.
In order to understand what SMEs think, an independent research company (BVA BDRC) spoke to nearly 18,000 of these businesses across the whole of the UK and its findings are contained in the latest SME Finance Monitor Annual Report for 2020.
Overall, it found that 75% of SMEs in London reported making a profit in the previous 12 months, which was in line with the UK national average.
The survey also found the that 44% of SMEs in London said they had been innovative which was in line with the UK national average including 19% that said they had developed a new product or service.
The overall level of SME innovation was the highest proportion recorded to date in the SME Finance Monitor and demonstrates how the pandemic has led to businesses taking tough, but hopefully beneficial decisions for the long-term.
As the economy begins to further open up, many businesses are looking beyond surviving to finding ways to thrive in the months and years to come. Around half of SMEs in London said they planned to grow in the coming year, with more than a fifth planning to grow by 20 per cent or more.
SMEs in London were more likely to have ambitions to be significantly bigger and amongst the most willing to take risks to succeed. As a result, they are more likely to agree that they are happy to borrow to grow and to have applied for finance as a result of a need for it.
Firms nationwide who were looking at growth said they were planning to either take on more staff, develop a new product or service, or invest in new plant, machinery or premises. These are encouraging signs as SMEs are the lifeblood of many local communities.
In the last year, more than 80% of SMEs who applied for finance to fund their growth were successful in obtaining it. Furthermore, the banking and finance industry has provided close to £80 billion worth of lending through the various government-backed loan schemes, including £16.3 billion to businesses in London. Now, as some of the government support schemes begin to taper off, the industry stands ready to provide SMEs with the access to finance to help them and drive the ongoing economic recovery.