Bridging the Gap between SME Confidence and Positive Investor Sentiment

16th September 2016

On 24 June, when the news broke that Britain had voted in favour of leaving the European Union (EU), there was a huge range of conflicting reports on what this momentous decision would mean for the UK and its economy. Central to these debates was what effect Brexit could have on small and medium sized enterprises (SMEs), which account for 99.9% of all private sector businesses in Britain.

IW Capital, which is committed to championing the UK’s high-growth small businesses, has been keeping a keen eye on how SMEs across the nation have responded to the result of the EU referendum. What has become clear is that this group of companies is resolute in its determination to grow, even during a period of political transition.

New studies released this week have underlined this point. Firstly, the latest Business Trends Report from BDO revealed that business optimism, which predicts growth six months ahead, is now up to 98.7 from 97.9. The results of the report prompted Peter Hemington, a partner at BDO, to say: “After the immediate Brexit scare, businesses are becoming more confident as they start to find that, for most of us, it’s back to business as usual.”

Elsewhere, the C2FO Working Capital Outlook Survey examined the views of more than 1,800 SMEs in the UK, US, Germany, France and Italy. It found that the majority of small businesses across these countries are more concerned about competition from emerging markets and higher interest rates than the effects of Brexit. Both these pieces of research reveal that SMEs are busying themselves with the usual business issues, rather than worrying about any adverse effects stemming from major political events, which bodes well for Britain’s small business sector in the current climate.

However, the CF20 survey also provided a more troubling finding; it uncovered that more than 60% of SMEs are concerned with their ability to finance long-term growth. This is an issue that must be addressed; SMEs must have the necessary financial support if they are to be confident enough to execute their growth plans.

IW Capital’s latest report – Understanding Investor Sentiment in the Wake of Brexit – delivered a cause for optimism in this respect. Based on a survey of 1,000 UK investors, it found that 52% of investors were willing to support British SMEs through private investment channels despite Brexit uncertainty. To help them act upon this positive sentiment, IW Capital has launched Access 42. This exclusive community of sophisticated private investors provides members with pre-emptive and unlimited access to our full suite of SME investment opportunities, industry research and VIP tickets to alternative finance conferences and networking events.

By bringing together investors, who are evidently willing to back small businesses, and SMEs keen for growth finance, the future of the UK’s private sector looks bright. Through our Access 42 initiative, IW Capital is working to bridge the investor-business gap, helping to turn positive investor sentiment and SME confidence into formative action.

To sign-up to Access 42 today, click here.