UK SME Confidence Levels Hits Three Year High Despite Funding Worries

UK small-to-medium sized business confidence has hit a three-year high as firms fight funding problems, according to research by Sage.

The software firm's Business Index 2013, which questioned more than 11,000 SMEs across 17 countries, revealed that UK SMEs recorded scores of 62.55 out of 100, an increase from 58.46 last year and the highest score recorded across the eurozone.

The survey also found that confidence in the UK economy among SMEs has risen by 8.51 points in the last year to 53.95, while confidence in the global economy is returning, rising 7.39 points in the last year to 51.10.

But the research's results were not all positive since UK SMEs described themselves as among the most risk-averse in the world.

Nearly four in ten (39%) UK respondents said they avoid dangerous decisions compared to a global average of 32% - placing Britain second only to Austria (48%) when it comes to avoiding making risky business choices.

Sage also said that most UK businesses feel that banks and governments are behind the curve and are failing to make the most of increased business confidence.

More than half (54%) of UK businesses agree that banks are not doing enough to make funding available to businesses and nearly three-quarters (73%) feel that the government needs to put more pressure on banks to lend.

"If businesses are to take advantage of the upsurge of economic confidence, then they need support and access to a wide range of funding sources, as in the US," said Guy Berruyer, Sage chief executive officer.

"More should be done to encourage investment in small businesses the world over. I believe that the development and encouragement of more diversified funding sources."

The Index also found that the core business priority for UK SMEs is winning new customers (28%), while more than half of UK SMEs (51%) say that cutting business bureaucracy would be one of the most important things the government should do to help business confidence.