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SMEs need a chance to get their foot in the door

Date Added: 21/01/2014  

The troubles facing the UK’s small and medium-sized businesses (SMEs) appear to be about more than just access to funding, as new research reveals that they are also missing out on public sector contracts.

More than 20 per cent - equivalent to around a million - of the UK’s SMEs have seen their chances of securing bank funding worsen in the last five years, according to a study from rebuildingsociety.com.

The research  also reveals that nine per cent of those SMEs affected have had the interest rate on their overdraft facility increased and seven per cent have had their access to additional finance limited.

In addition to restricted access to the funding they need, new research suggests that they are missing out on work opportunities. 

According to a study from Achilles, around 96 per cent of businesses in the UK are classed as SMEs, but they are only managing to win approximately 10.5 per cent of public sector contracts, which is less than half of the target set by the government.

These figures, when examined in a positive light, present a unique opportunity for SMEs to secure more work within the public sector - that is if the latest government proposals can be adjusted slightly.

The Department of Business Innovation and Skills has recently released £116 million worth of funding for businesses that can create projects designed to improve the global competitiveness of their supply chains via the Advanced Manufacturing Supply Chain Initiative. 

The Confederation of British Industry (CBI) is also calling for SMEs to improve their supply chains.

Recent supply chain disruptions, such as the horse meat scandal, demonstrate that supply chains are now globalised, meaning that companies on the other side of the world have an impact on SMEs and vice versa. 

Achilles believes that it is incredibly encouraging to see the government's commitment to supporting SMEs during challenging economic times.

However, it also feels that to help UK SMEs secure work in the long-term, the government needs to implement a collaborative and technical solution for evaluating the suitability and performance of each individual business.

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