Small firms 'being more resourceful with credit'

Smaller manufacturers in the UK are turning to alternative forms of credit and financing in order to expand, according to an industry body.

The Confederation of British Industry's (CBI) latest SME Trends Survey has revealed that there is a positive balance of 19 per cent of manufacturers expecting their output to go up this quarter.

This is more than double the balance reported in the third quarter of this year (nine per cent).

More firms were planning to invest, with six per cent and ten per cent looking to purchase more machinery (six per cent) and develop existing means of product and process innovation (ten per cent).

However, there was a rising balance of firms claiming to be experiencing difficulties in getting credit (12 per cent).

Russel Griggs, the chairman of the CBI's Small and Medium Enterprise Council, said: "SMEs are turning to a wider pool of funding options to get the credit they need to grow their businesses, including trade credit.

"Banks remain an important source of finance, but there remains a lingering perception that applications will be refused."

Published on: November 4, 2010

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