Mar 29, 2013 Simon Williams
Small businesses in the United Kingdom are more confident than they've been in awhile, according to a recent study from the Federation of Small Businesses (FSB), and that's nothing but good news for the British economy.
"Confidence is key to recovery and I am heartened to see that more small firms are planning to invest," said Andy Willox, the FSB's Scottish policy convenor, according to the BBC. "That means more orders placed, more business being done and fewer suppliers looking nervously at empty order books and trimming staff costs."
The survey indicated that owners are planning to up their investments in 2013, but few will lean on financial institutions to do so. More than half of respondents said they will expand their business over the next 12 months, yet just 19 percent expect to ask banks for funding.
So what then has spurred this sudden growth in confidence? Most likely, the rise of alternative short term lending has played a major role.
Banks primarily use credit scores to determine eligible candidates, which has dramatically suppressed the amount of companies that have been able to secure funding. Alternative lenders, on the other hand, have made finances available to a wider range of businesses through the use of Payment Reporting Builds Credit scoring methods.