Those in construction (£225,000) and transport (£209,000) plan to invest even more.
The Pandemic Recovery Survey from Bibby Financial Services reveals that three quarters (75 per cent) share a positive outlook and 74 per cent believe demand will return to pre-pandemic levels by Christmas.
Three-fifths (61 per cent) are planning to dedicate a portion of money to staff training and development (39 per cent) and new staff (29 per cent). This means nearly a third of the UK’s six million SMEs are planning to increase their workforce – providing a powerful boost to the UK’s economy.
This coincides with a forecast from The Bank of England that is more positive than expected. The new forecast predicts that GDP will grow by 7.25 per cent this year as household spending rockets from £200m of lockdown savings.
However, there are still challenges for SMEs including late payments, bad debt and repaying Covid loans. Almost two-fifths (39 per cent) haven’t yet considered or don’t know how they are going to repay these loans. Meanwhile, the average SME is owed £116,376 and more than a quarter (26 per cent) say they need cash flow support more than ever. SMEs who have had bad debt during the pandemic are twice as likely to be in survival mode – 32 per cent compare to 14 per cent on average.
>See also: What happens if I can’t repay my Bounce Back Loan?
Estimates from the National Audit Office (NAO), the Department for Business, Energy and Industrial Strategy (BEIS) and the British Business Bank (BBB), show that between 35 per cent and 60 per cent of Covid loan borrowers may default. The BFS findings also show that 55 per cent plan to repay these loans using company profit.
Jonathan Andrew, Global CEO of BFS said: “The UK’s SMEs have had an incredibly difficult year, and it’s fantastic to see that the vast majority are optimistic for the year ahead. It’s hard to predict what the long-term impact of the pandemic on the UK economy will be and it’s unlikely that it will become clear for some time yet. However, as demand begins to return to normal and SMEs look to meet it, cash flow is going to be key.”