"The research demonstrates the resilience of the UK SME and points to signs of a strong recovery for many businesses as they invest their built-up reserves."
Despite 50% of SMEs noting a reduction in monthly business revenue since the pandemic begun, there remains signs of optimism with 94% of respondents confident that they will survive the pandemic and 66% ready to invest in 2021.
New research conducted by Cynergy Bank found that SMEs have on average £375,000 ready for investment. This figure rises to £750,000 for SMEs in the North East, who have set aside considerably more for investment than other regions. Women respondents and those aged 55+ recorded a lower average figure available for investment at £175,000, compared with men and the under 55s who reported figures closer to the average of £375,000.
Of those that have money in reserve for investment, the top five ways they intend to spend it are on IT infrastructure (29%), demonstrating the continued focus on technology brought to the forefront for SMEs as a result of the pandemic. Other investment priorities included business continuity and trading (28%), equipment (24%), employee training (20%), and hiring new staff (17%).
In terms of the source of financing for investment, overall SMEs intend to rely on private funds. 71% of SMEs in Northern Ireland will rely on private funding for investment compared with 53% in London. Women and those in the 18-34 age group will rely most heavily on private funding with 56% of women and 64% of those aged between 18-34 intending to use some form of private funding for investment.
Nick Fahy, CEO of Cynergy Bank, commented: “Despite the challenges brought about by the pandemic, SMEs are ready to respond through increased investment in 2021. The research demonstrates the resilience of the UK SME and points to signs of a strong recovery for many businesses as they invest their built-up reserves. Unsurprisingly there is a real focus on investing in IT infrastructure as the pandemic has seen many businesses move to working from home.
"Adequate levels of investment are important for SMEs to ensure long term growth and success. It is therefore important to note the disparity in the amounts available to invest between men and women. Our & Daughters fund, a £75m fund designed to help female-led family firms make the investment they need to grow, will go some way to addressing this issue. It is important for the banking industry to remain a key source of support for SMEs, issuing funding and personalised advice to expediate the SME bounce back and future growth.
"Here at Cynergy Bank we understand that SMEs are the lifeblood of the UK economy and we stand ready to support customers across the UK to be there for those that need extra support during these challenging times.”