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EU support proving “vital” for SME’s

Small business survival rates are as high as 91 per cent after one year of trading, but after five years just four in ten small businesses will still be trading, research finds.

Poor cash flow can be a major problem. Small businesses can fail for many reasons, but poor cash flow remains one of the main causes of problems. This is mostly resulting from late payment of invoices which can be addressed by any small business. SME’s should be strict and upfront about payment terms initially and using the right tools to provide insight
into how they should trade with customers and what action to take to reduce risk of non-payment. This is difficult when starting up a business, as the last thing you want to do is alienate your customers, but if you want to survive you need to be paid!

So it is not surprising that almost 8 in 10 (78%) small businesses have sought support services, such as EU-funded schemes, over the last 12 months.

Out of 1,659 members surveyed by the Federation of Small Businesses (FSB), firms in Yorkshire (25%), North East (22%) and North West (18%) were most likely to submit applications for EU-funded schemes.

Of those who have applied to such schemes, 68% said EU funding has had a positive impact on their business despite encountering varying levels of bureaucracy with the application process.

Such frustrations included:

– the amount information required to make an application (59%)
– the length of the application process (47%)
– excessive reporting requirements after funds are granted (44%).

The EU has provided £3.6 billion to develop the competitiveness of small businesses, which ends in 2020. However, there are no funding plans poised to come in beyond 2021.

FSB is calling on the new government to create a streamlined growth fund to replace EU funding and the Single Local Growth Fund in post-Brexit Britain.

Mike Cherry, national chairman at FSB, said:

“Small businesses across the country are staring into a business support black hole from 2021. This is a particularly pressing issue for the many small firms with growth ambitions and those in less economically developed regions.

“Small businesses are clear that EU-funded support is a vital lifeline, but they’re equally clear the process for attaining that support can be a real battle.

“If the next government is serious about developing an industrial strategy that delivers prosperity across all areas of England, it must replace EU funding dedicated to small business support and access to finance after we leave the EU.”

If you would like more information on how to grow your business, by investing in your most valuable asset, contact Sarah or Sally at SYLO Associates.