Welcome to the Close Brothers Asset Finance update of the Transport industry where we highlight a wide range of issues relevant to SMEs in this industry.
The results are based on the Close Brothers Business Barometer, a quarterly survey of close to 1,000 SMEs across the UK conducted by specialist independent researcher, GMI, on Close Brothers’ behalf. Where relevant, comparisons are made with national sentiment.
Since the start of the year, Transport and Haulage SMEs optimism about the economy has dropped by 10%, from 36% to 26%. The rest of the UK has held steady at 36%.
A further 28% think it will be a slow path to prosperity while 24% are concerned about coming economic decline.
Looking ahead, just over half (52%) of Transport firms expect their performance to remain static, while 33% (down from 42%) are hoping to expand their operations in the 12 months ahead; 16% predict their business will either contract or close down.
Concerns and priorities
Maintaining cash flow is the biggest concern for 21% of businesses in the Transport industry, followed by ‘late payments’ (19%) and ‘competitors’ (17%). At a national level, cash flow is a far bigger concern than it is for Transport SMEs.
When it comes to future priorities, At 35%, ‘achieving growth’ is by some distance the Transport sector’s main priority, followed by ‘business consolidation’ (24%) and ‘paying down debts’ (23%).
Despite businesses in the sector showing a willingness to invest, one third (33%) of those polled are finding it a ‘major challenge’ to access the funding they need and more difficult than it was a year ago. A further 29% are saying that it hasn’t become any easier to get hold of finance and is as problematic as it’s ever been.
Only 11% say it’s become easier while 27% have ‘never had a problem accessing finance’.
Regardless of the challenges, 59% of business owners said that they would be seeking funding for business investment in the coming 12 months, which closely tracks the national sentiment.
Avenues for financial support and advice
At 21%, accountants and financial advisors share the top spot for Transport and Haulage SMEs’ main sources of financial support and advice. They are closely followed by bank managers, which reflects their diminishing role in influencing business owners’ investment decisions.
Typical funding sources
With the wide number of funding sources available to businesses today, personal and family loans are still – along with bank loans – the most popular sources of funding, followed by credit cards and overdrafts.
What type of funding do you usually use for your business?
- Personal / family funding
- Bank loan
- Credit cards
- Invoice finance
- Finance lease
- Hire purchase
- Operating lease
- Crowd / peer to peer