More Funding for SMEs Could Create Half a Million Jobs
A new study shows that there is the potential to create as many as 500,000 jobs in the UK if small businesses can get access to funding.
The research, by innovative business lenders Funding Circle, believes that up to 1.5 million SMEs are unable to meet staffing requirements because the banks are still refusing to lend to small firms.
500 small businesses were surveyed in the first ever quarterly Funding for Growth study by Funding Circle and 33% of those polled said they would take on more employees if they had more money.
31% of the small businesses surveyed reported that they would use finance to grow their enterprise in other areas.
When questioned how much they might expand their staff numbers by, the SMEs in the study responded that they would, on average, increase employee numbers by around 12%
James Meekings, Funding Circle’s co-founder and chief marketing officer said of the findings:
“With the right support, these frustrated businesses could be the future drivers of our economy, with the ripples of job creation being felt throughout UK industry.
“Not only would the economy feel the direct impact of a boost in employment, but a quarter would also use finance to increase stock, supporting businesses throughout their supply chain.”
“Instead, they risk becoming a lost generation of ‘caged tigers’ stifled by a lack of business finance.”
If those 1.5 million small businesses in the UK would, on average, increase their staff numbers by 12% then that would add 500,000 more people to the UK workforce, in turn taking those half a million Brits off the dole queue. That figure would reduce the number of unemployed to pre-recession levels.
The peer-to-peer social lending platform has lent around £30,000,000 to over 700 small firms since its launch in 2010, all from members who make average 8.3% gains on the money they invest into businesses in the Funding Circle.