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AIA

AIA Snapshot survey: Hard times ahead

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22nd Oct 2012
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Whatever the macroeconomic analysts are saying this month, the Association of International Accountants (AIA) found from a survey of its members that life is still tough for small businesses.

Just 13% of respondents to the association’s SME Snapshot survey reported that they thought the economy would improve in the next 12 months, with the remainder split between those who thought it would remain static and those who thought it would get even worse.

“The biggest challenge is cashflow. It’s what makes a company successful, or what makes it fail,” said AIA CEO Philip Turnbull as he presented the survey results at the recent AIA founder’s lecture in London.

With cashflow cited by 63% of AIA respondents as the most pressing issinue, 27% highlighted winning new business. Another hot topic was access to funding, with 94% of responses to a separate question indicating that companies were having trouble accessing funding from banks.

“Banks are now the bogeymen,” said Turnbull. “SMEs are really struggling to find funding. No funding from banks means zero growth and ultimately no NHS. Somebody will have to do something, and that’s the government.”

Fewer than one in five of the respondents thought initiatives to unlock bank finance such as Project Merlin or the National Loan Guarantee had had a positive effect - and nearly half didn’t actually know such schemes existed.

Instead, 81% of those surveyed were considering alternative routes to finance, with 31% indicating that they were exploring peer-to-peer lending options and more than half tapping up friends and family.

“Often this is a very dangerous source,” said Turnbull. “If it all goes wrong, you won’t keep many friends, and you don’t want to make your family bankrupt.

When asked what they thought the government could do to support SME growth, 35% of respondents answered, “Simplify the tax system and make it proportionate.”

Turnbull commented: “Our tax system is very complex and keeps a lot of us here [at the lecture] in work. But as small businesses will know, understanding the tax system can be very demanding and puts people off starting a business.”

In summary, he continued, “It doesn’t look very good. If finance isn’t switched back on we’re all going to be worse off.”

In spite of the gloomy results, he predicted that small firms would continue to find new openings and opportunities, both by developing export markets and by supplying the public sector, which was beginning to relax its bias in favour of larger suppliers.

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By BabsHarris
25th Oct 2012 19:40

SEIS?

Just been to a seminar on SEIS and could only think WOW!

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