Commercial finance brokers remain split on the prospects for the UK economy over the next year, with uncertainty continuing to weigh on confidence, new research indicates.
A survey of brokers carried out by SME funder Asset Advantage found that views on the economic outlook for the next 12 months remain mixed.
Almost half of respondents (49%) described themselves as neutral, while more than a quarter (28%) said they were pessimistic about the direction of the economy.
Just over 20% brokers said they felt optimistic about the UK economy’s prospects, underlining the lack of consensus as businesses assess whether to invest against a backdrop of wider economic and market pressures.
When asked about the factors shaping their outlook, brokers cited government taxation, business confidence, rising operating costs and inflationary pressures as the most significant concerns.
One broker pointed to “cashflow and uncertainty” as the key issues, saying: “Decisions are taking longer as businesses feel the pinch and have to be careful with additional investment.”
Another added: “Inflationary pressures mean businesses make lower profit which in turn affects their serviceability and ability to borrow.”
“BROADLY POSITIVE”
Despite these headwinds, separate research by Asset Advantage suggests brokers remain broadly positive about their own business prospects over the coming year, with expectations of continued demand from small and medium-sized enterprises for asset finance and business acquisition funding.
Gary Thompson, sales director at Asset Advantage, said: “While there’s still very much strong demand for business funding, there’s no doubt that many businesses are feeling cautious in the current climate.
“Big factors such as higher operational costs, inflationary pressures and both geopolitical and economic uncertainty all continue to have an impact on business confidence and influence borrowing and investment decisions.
“Against this backdrop, the case for flexible funding options from pragmatic and forward-thinking funders becomes ever clearer. Working with expert commercial brokers, specialist funders who are willing to support complex, growth-focused deals will be key to giving SMEs the confidence they need to push ahead with their expansion plans.
“Brokers play a critical role in fostering confidence among their clients and demonstrating what is possible. To ensure they can continue doing this, they need the support of specialist funders and providers.”
Asset Advantage is also set to host a regional broker roadshow in Manchester, London and Birmingham, aimed at supporting brokers in structuring deals for success.
