Yorkshire SMEs plan for growth through investment, Paragon Bank report finds

The findings were published in An SME Led Recovery, the first in a series of quarterly research reports that will track the sector.

The report details the performance, plans and ambitions of SMEs, highlighting the central role they play in the regional economy.

The research, conducted for Paragon by Opinium, found that 53 per cent of Yorkshire SMEs predict that their cashflow will increase over the next six months. Only 18 per cent had seen their cashflow improve over the previous three months.

Similarly, turnover is also set to improve – 49 per cent of Yorkshire businesses reported increased turnover during the first quarter of the year, with 40 per cent expecting turnover to improve further during the second quarter compared to 28 per cent that forecast a fall.

Three-quarters of Yorkshire SMEs will use cashflow and financing to maintain investment in their businesses over the next six months.

Machinery and equipment lead the planned investment of SMEs, with 25 per cent and 20 per cent of all SMEs planning investing in each respectively. The figure is a smaller proportion than had done so over the preceding six months, though the number of firms in the region investing in light commercial vehicles doubled to 10 per cent.

The renewed investment will also see 18 per cent of Yorkshire SMEs investing in electric vehicles over the next six months – an increase on the five per cent that had done so over the previous six and higher than the proportion set to in invest in traditional fuel vehicles.

Yorkshire SMEs have expressed confidence in the prospects for their own businesses and the sector in which they operate but were less confident about the macro environment. Over half said they were confident in their own business (55 per cent) and their sector (60 per cent) in the next three months - compared to only 35 per cent who expressed confidence in the wider UK economy.

The research also found that 33 per cent of Yorkshire SMEs sought additional financing over the last three months, with 31 per cent of those businesses seeking over £100,000.

While five per cent of this group received no additional financing, eight per cent received all the financing they sought and a further 20 per cent secured a partial amount.

Ashley Butterfield, Paragon’s regional director for Yorkshire, said: “Our new research data demonstrates that Yorkshire SMEs have shown tremendous resilience over recent years and are set to drive economic growth throughout the region.

“After facing challenge after challenge, Yorkshire SMEs are today feeling confident for both their business and the sector in which they operate – and by seeking additional financing they are preparing for the future.”