Paul Evans is area director for SME Banking in London, Lloyds Bank Commercial Banking
With the British economy now estimated to be 5.9 per cent above its pre-recession peak in terms of GDP, London SMEs are in a strong position as we approach the end of the year, as are others in neighbouring regions.
However, it’s vital that support and encouragement is provided to these firms to bolster this confidence and drive further economic growth in 2016.
A renewed sense of optimism in London was reflected in the latest Lloyds Bank London Purchasing Manager’s Index (PMI) report, which showed that companies experienced another consecutive month of rising activity and a further marked increase in new business during October.
In addition to this, robust employment growth has been maintained throughout 2015, evidencing firms’ determination to recruit new talent and strengthen their workforces in preparation for the year ahead. Our recent research on millennials – those born between 1980 and 2000 – brought to light that, in London, more than half of this generation are hungry for work and would move anywhere for the right job. As a result, many SMEs in the capital are looking to invest in developing their working practices to attract young talent.
We have a duty to continue to champion London businesses and help them realise their ambitions. Whilst we are able to provide support on a range of issues, the most common areas that business owners ask for our support on are finding the right funding solutions, using our sector expertise and learning about ways target new markets.
The right financial support is vital to unlocking new opportunities, but I know that many local firms are unaware of the full breadth of funding options available to them.
From overdrafts and other simple credit facilities to trade finance and asset based lending, there’s a range of financial support available to help SMEs at every stage of their development as a business. We recommend different facilities to suit each firm and its goals. For example, asset based lending is ideal for manufacturers, as they are machinery heavy and this enables them to borrow against the value of their assets and activate their expansion plans without impacting on their day-to-day operations and cashflow.
There are also a number of government initiatives available to support businesses with ambitions to grow, including the Funding for Lending Scheme (FLS), which enables us to provide even more competitive lending to firms for the life of their loans – making it better value to borrow.
Seeking sector expertise
Face-to-face business advice is the most practical way London business leaders can seek guidance on a range of issues, from generating cash flow to targeting markets overseas. Our dedicated relationship managers pride themselves on truly getting to know each business and its individual objectives. Many of them hold professional sector qualifications, enabling them to provide truly valuable and strategic guidance.
Another proven, and very popular, way in which owner-managers can access support is through business mentors. Enterprise mentoring can help firms bolster strategy and explore diversification in order to drive growth.
All across the country, companies have committed resources to help mentor small and medium-sized enterprises. At Lloyds Bank we’ve pledged to develop our UK network of enterprise mentors by pledging 500 volunteers this year.
Targeting new markets
The export market is hugely important to the British economy, and is a priority for local businesses too, with recent figures* showing that a third of London firms are currently selling their goods or services abroad. For those already trading internationally, the activity generates nearly two-fifths (39 per cent) of their total sales turnover.
Lloyds Bank has a strategic partnership with UKTI to help British businesses export and meet the Government’s targets for trade and investment by 2020. The partnership is helping to deliver greater regional coordination of work between UKTI and Lloyds Bank, as well as deliver export advice to businesses looking at key markets such as Europe and the Far East.
Paving the way for London SMEs
Whatever strategies local firms employ to achieve their ambitions, expert guidance and tailored funding will play a central role in enabling them to capitalise on opportunities. Through a combination of these factors, we can help businesses in London ramp up activity into the New Year and achieve their ambitions for 2016.