Medium-sized businesses grew more quickly, generated larger profit growth and created more jobs in the past year than Britain’s large and small companies, according to research undertaken by accountancy firm BDO. However, they are at risk of being overlooked as the nation prepares to leave the European Union, with both smaller and larger businesses more likely to gain the investment needed for growth.
Medium-sized businesses created 780,000 new jobs last year, almost six times more than smaller businesses (135,000) and FTSE 350 companies (320,000) over the same period, BDO said. Just 30,000 medium-sized companies, or 1.5 per cent of all UK businesses, contributed a third (£1.2 trillion) of all UK turnover.
In their latest New Economy Report, Paul Eagland, managing partner at BDO, highlights how the UK government should “retain a variant of the financial services passport”, should cut red-tape and “commission infrastructure projects that bring immediate economic impact”.
Mid-sized firms represent Britain’s "economic engine", but fall into a "policy and profile" gap – "too big to benefit from government initiatives aimed at small firms but too small to win the attention that FTSE firms command from the media and policymakers", the accountancy firm said.
In a 2017 survey of 506 key decision makers within small to medium-sized businesses, conducted on behalf of LDF, a third of medium sized businesses highlighted that they had previously been turned down in their effort to secure finance.
Getting their application approved was another key area that 31 per cent of businesses felt had a negative impact on their business, with 22.3 per cent unable to take holidays and 20.1 per cent having to work additional hours during this period.
The same amount of owners (20.1 per cent) were unable to pay their staff during this time, a particularly worrying finding that could have consequences for many businesses.
Mid-sized businesses represent Britain’s “economic engine”,
but fall into a “policy and profile” gap
Peter Alderson, managing director at LDF, highlights the need to ensure that all sizes of business can access the finance they need: “There is a limit to what government can do in this respect, as they have already created a platform and significant supply to support the smaller businesses. It is vital now that they make sure they do not overlook those medium-sized firms who are clearly having a great impact on our economy.”
While we remain unclear about our future as we get ever closer to our formal departure from the EU, for mid-sized businesses it is business as usual. And although the same challenges of managing cash flow, paying tax bills and funding business growth remain, we are offering a simple, no hassle finance solution.
We have recognised that there is shortfall in smaller business funding, with a £35bn black hole. The unnecessary red tape that medium-sized businesses must go through to access the money they need sees many businesses applying for funding less often than they should, with some not applying at all.
By removing the bureaucracy from our business, we’ve ensured that applying for and receiving the finance businesses need is faster and more efficient. Business owners and directors will always be able to speak to a person and be treated like an intelligent human being, not like a tick box on a form.