The study is based on detailed online interviews with 117 small and medium sized businesses. The businesses were drawn from across the UK and from a mix of sectors.

In general, the study paints a picture of an SME community in bullish mood. Just under half plan to expand into a new area in the next 12 months and a further 37% will recruit new staff. Over one in three plan to launch a new product or service and only 1% plan to scale back their operations. Indeed when asked to state their future optimism, over three quarters (78%) of SMEs said they were confident about the future of their business.

The survey highlights a real audience split with some SMEs noticing the effects of the credit crunch on their business and others seemingly untouched. For instance, the report showed that 28% say that they are now finding it harder to borrow from the bank, whilst 38% of respondents from the same survey admitted to not noticing the credit crunch.

However, there is no doubt that some SMEs are feeling the pressure of the credit crunch. For instance when asked what changes their business had noticed in the last 12 months, the top response with 56% was that suppliers had increased their prices. With other half of suppliers increasing their prices this will have a huge impact on the supply chain, affecting further businesses throughout the UK.

Despite being under pressure from suppliers, many feel unable to increase prices with their own customers, especially as many are facing weakening demand. Only 18% say customers are buying more on credit, and over half of SMEs (55%) admit that their customers are more and more frequently looking for deals or asking for discounts.

Kamala Panday, Publisher of Credit Today, organisers of The Credit Show comments: “For some, the credit crunch is beginning to bite. However this survey shows that their hunt for growth has not been affected. Businesses are now playing a more strategic game, with over half admitting to chasing slower payers more vigorously.”

“What’s encouraging to see from our point of view is the increasing role that the credit control function is playing with the SME strategy.”

Indeed with over half of SMEs saying that the credit control function has become more important, and with 30% tightening their grip on their credit control function through introducing stricter credit terms, credit issues have never been as important as they are today with SMEs. Through further analysis of the findings by business age, the report identifies how the value of experience cannot be overestimated. Businesses that have been operating for more than 3 years and have perhaps experienced previous tough times are more cautious about over-stretching themselves and are acting in a more responsive manner.

For example 61% of these businesses are chasing slow payers more strongly, almost the same number see the control function as an important part of the business (59%), and they are far more likely to take non-payers to court than those running younger businesses. On the other hand SMEs who have been operating for less than 3 years are more focussed on moving into new markets and recruiting new staff (49% and 43% respectively).

Kamaly Panday adds: “This is great to see from young businesses. However these businesses need to take care; the flip side of this expansion is greater business exposure, which could cause problems considering the current climate. If they are going to move into new markets more actively, they should do so with good credit management procedures in place. Otherwise they could come unstuck.”

“At the Credit Show this year we are more focussed than ever on the SME community, and this report will help us shape and develop the Show even further. In general, the overall picture is one of optimism, and it’s great to hear of the bullish mood that SMEs are in today, especially as they are such a vital part of the UK economy.”

To download a copy of The Credit Show’s ‘Credit Crunch and its impacts on SMEs 2008’ report, visit

www.creditshow.co.uk

Ends

For further information, please contact: David Barrett, Energy PR, 01993 823011, david@energypr.co.uk

Notes to editors

The Credit Show is the UK’s largest exhibition and conference dedicated to professionals associated with the consumer and commercial credit arena.  Organised in conjunction with Credit Today magazine, the nation’s most widely-read credit publication, the Credit Show will be held at the Olympia Conference Centre London from 14 –15 May 2008.  Entry to the show is free for pre-registered visitors.  Visit www.creditshow.co.uk for more information and to pre-register.

At the Credit Show this year, which takes place during Credit Awareness Week, the Show has been more focussed than ever on the SME sector. For the first time the Credit Show are holding free to attend credit clinics aimed at the SME markets covering topics such as Credit scoring and litigation. The Show attracted over 1,000 visitors last year and had 60 exhibitors, with the same if not more expected to attend for this years show.

There is also a conference that runs alongside the Show, again where speakers have been chosen that would be of interest to the SME market. This being no more so than the guest speaker Gerald Ratner, who is one of Britain’s best-known businessmen, and who will be speaking on ‘how credit saved my life.’

Back