Lending to small businesses hits all-time low, new study finds, with six in ten impacted by late payment
The Federation of Small Businesses (FSB) is warning that banks “pulling up the drawbridge” to small firms will further stifle economic growth as its new Small Business Index (SBI) study shows successful finance applications plunging over the first quarter of this year.
Fewer than one in ten (9%) small firms applied for finance in Q1 2022, the lowest proportion since SBI records began. The share that saw applications approved (43%) is also at a record low.
The number of respondents describing the availability of credit as “good” (19%) has tumbled to its lowest point since 2016. A minority (44%) of successful applicants were offered a borrowing rate of up to 4% in Q1 – the figure is down 32 percentage points on the same period last year.
Of the few firms that did manage to secure finance, four in ten (42%) plan to use credit to manage cashflow, considerably more than the numbers planning to use funds for equipment updates (21%), expansion (19%) or recruitment (4%).
The majority (61%) of small firms were impacted by late payment of invoices over the first quarter of this year. A quarter (26%) say the propensity for late payment is growing – close to one in ten (7%) experienced late payment for the first time in Q1 of this year.
Of those that applied for finance, the majority (61%) sought traditional overdraft and/or loan products. A quarter (25%) applied for asset-based finance, such as invoice finance, with smaller numbers seeking funds through peer-to-peer platforms (7%) and/or crowdfunding (5%).
Latest Bank of England figures show the annual growth rate of lending to SMEs at a record low, despite small firms making net debt repayments of close to £1bn in March alone. Lending to big corporates, by contrast, has increased significantly since the start of the year.
One in ten (11%) small firms plan to close, sell or downsize their business over the coming year, equating to more than half a million businesses.
FSB national chair Martin McTague said: “Lenders pulling up the drawbridge for small firms will threaten our already faltering economic recovery.
“Businesses are born every day across the UK – many need funding to get off the ground, ensuring they reach a stage where they’re profitable and creating opportunities.
“A lot of those who’ve worked tirelessly to adapt, survive and thrive over lockdowns need finance too, empowering them to take their firms to the next level, driving our economic recovery and the transition to net zero in the process.
“A big chunk of what little finance is being accessed is being used to manage cashflow challenges as our late payment crisis worsens, rather than for much-needed investment and innovation.
“The Government should accelerate delivery of our proposal to make Audit Committees directly responsible for supply chain practice to address this worrying trend.
“Culture change is what’s needed here – lenders taking an objective approach to small business finance and big corporates putting best supply chain practice at the heart of environmental, social and governance programmes.
“The result would be win-win: strength in corporate supply chains and a thriving small business community driving economic growth from the ground up.”
New £2m accommodation opens for homeless people in Nottingham
Sir John Peace, Lord-Lieutenant of Nottinghamshire and patron for Framework, has opened a new purpose-built Framework building, providing accommodation for single homeless people.
Sixteen people supported by Framework have moved into the new one-bed flats at Mechanics House off Mansfield Road, which replaces Framework’s hostel about a mile away, on Forest Road West.
Nottingham City Council has contributed £500,000 from S106 planning funds towards the scheme, which is worth just over £2 million in total, along with funding from Homes England and Framework.
Framework staff will be on-site for 24 hours a day to manage the building and provide specialist support to the residents, focused towards successful long-term resettlement.
Cllr Toby Neal, Nottingham City Council’s portfolio holder for housing, said: ”Framework provide a range of important services supporting some of the most vulnerable people in Nottingham. The quality new facility will be vital in tackling homelessness and help provide better outcomes for people with complex needs.
”The ongoing partnership work between the council and Framework is having a real and positive impact on people’s lives and this new development will help to continue this.”
Speaking about this major housing development, Framework’s Chief Executive Andrew Redfern said: “The creation of Mechanics House reaffirms Framework’s ongoing commitment to providing good quality homes and living environments for homeless people. The difference in outcomes for those living in a new flat with their own front door, compared to a dingy room in an old hostel, is stark.
“There are benefits not only for the individual, but also the public purse: investment in good quality supported housing gives service users a much better chance to re-establish their independence quickly, thus leading to a long-term reduction in the cost of services to support them.”
D2N2 LEP’s Manufacturing Advisory Panel back Derby GBR Bid
The D2N2 LEP Manufacturing Advisory Panel met last week at SPE Swiftool Precision Engineering Ltd in Sutton-in-Ashfield.
Alongside discussing a range of activity to support its maker SMEs, the Panel took time out to show their support for the Derby GBR bid and the significance this would have for the region – not just for Derby and the rail sector but also the wider manufacturing base.
Great British Railways (GBR) will be the new single public body responsible for running and transforming Britain’s railways. The aim of GBR is to create a simpler, better railway for everyone in Britain.
If successful, Derby’s bid to become the home of GBR would bring new jobs to the city, boost the local economy and support planned regeneration and future developments.
Frank Horsley, head of business and innovation at D2N2 LEP, said: “Manufacturing is at the heart of Derby’s industry and is an historically important sector for the region. The LEP, and the Manufacturing Advisory Panel fully support Derby’s bid to become the home of GBR – it’s a natural fit and we believe is would be an excellent choice.”
‘Six of the best’ investment opportunities in Derby and Derbyshire to be showcased at major investment show
Six of the best investment opportunities in Derby and Derbyshire are set to be showcased at a major investment show taking place this week.
Marketing Derby’s investment team will be present at the UK’s Real Estate Investment and Infrastructure Forum (UKREiiF), which is taking place at the Royal Armouries Leeds, from Tuesday, 17 May.
The three-day event will bring together the public sector – with every core UK city and region involved – alongside government, investors, funders, developers, housebuilders and more.
With more than 5,000 people set to attend, among the key events taking place will be the launch of the Midlands Investment Portfolio.
Put together by the Midlands Engine, the portfolio details investment opportunities across the region, including six key opportunities in Derby and Derbyshire.
Those opportunities are Infinity Park Derby, SEGRO SmartParc Spondon, Derby’s Heart of the City scheme, Heart of Chesterfield, the South Derby Growth Zone and the East Midlands Intermodal Park.
John Forkin, Managing Director of Marketing Derby, said: “Following a number of events held in Cannes at MIPIM earlier this year, Marketing Derby will be attending UKREiiF in Leeds to follow up contacts made, as well as catch up with many of our Bondholders from the investment and development community.
“We have also been part of the team that has pulled together the Midlands Investment Portfolio, which will be launched at a reception in the Royal Armouries and this contains six of the best opportunities in Derby and Derbyshire.”
The six Derby and Derbyshire schemes included in the Midlands Investment Portfolio have been taken from the Derby Investment Prospectus and the Derbyshire Investment Prospectus.
The Derby Investment Prospectus showcases 16 key investment opportunities across the city, worth £1.2 billion.
And the Derbyshire Investment Prospectus, produced by Marketing Derby’s Invest in Derbyshire service, on behalf of Derbyshire County Council and Derbyshire Economic Partnership, details over £1 billion key regeneration opportunities across the county.
In total, 23 projects are featured in the Derbyshire prospectus, spanning the length and breadth of the county. These range from major sites which will help drive economic prosperity and support a growing population, to smaller projects at the heart of communities.
Some of the projects in both prospectuses will provide the focus for the forthcoming Derby Property Summit, which is due to take place at QUAD, on Wednesday, 13 July.
Matthew Hoggard & Mo Walker open new WestBridge Group HQ
Former England Cricketer, Matthew Hoggard MBE, and British Basketball League winner Mo Walker from Leicester Riders were the VIP guests at the official opening of the new HQ of The WestBridge Group.
The company relocated to Dominus Way on Meridian Business Park in Leicester earlier this year as part of its growth strategy to create a centrally based HQ in a location with easy access to all essential transport links.
Having retired from cricket, Matthew appeared in an edition of Celebrity MasterChef in 2013. Since then he has honed his skills and has established his own cookery school and outside catering business called ‘Hoggys Grill’ which is located in idyllic settings on the banks of Rutland Water within Rutland Water Garden Nurseries.
Over 60 guests attended the opening and were served authentic Indian cuisine carefully prepared by Matthew and his outdoor events team. They were also treated to an informative Q&A session with Matthew and Canadian born basketball player Mo Walker who, standing at 6ft 10 inches tall, talked about his highly successful career and his experience playing for Leicester Riders, who yesterday beat London Lions 78-75 to take the BBL play-off, and become treble champions.
Tom Moore, founding director, said: “It was great to see so many of our clients and other East Midlands business professionals gathered together to officially open our new HQ. The demand for specialist tax advice and pension administration services is growing and by holding an official opening we have been able to thank everyone who has supported us so far and continue to raise awareness of our specialist expertise.”
The WestBridge Group provides specialist tax advice and independent administration, consultancy, and trustee services for Small Self-Administered Pension Schemes (SSAS).
New partnership to own and develop Silverstone Park
Federated Hermes, on behalf of the BT Pension Scheme (BTPS), and Canada Pension Plan Investment Board (CPP Investments) have announced a new partnership to own and develop Silverstone Park, the engineering and technology business park.
MEPC, the wholly owned subsidiary of Federated Hermes, will continue in their role as development and asset manager, having established the Park over the past eight years on behalf of BTPS, building a strong management team and community relationships.
CPP Investments will commit £135m to the joint venture and hold a 50% interest, with further investment planned to support the future development pipeline of the Park. Silverstone Park stands at 676k sq ft of income-producing assets let to a strong and diverse tenant base in addition to 92.6 acres of land upon which has long term development potential for a range of uses.
Silverstone Park is located in the Oxford-Cambridge Innovation Arc, one of the fastest growing areas of the UK supporting more than two million jobs and contributing over £110 billion annually to the UK economy. The Park is situated immediately adjacent to the Silverstone Circuit, the home of the Formula One Grand Prix.
The Park provides a global destination for innovation, business development and engineering, and has attracted over 80 high-tech engineering companies with current occupiers focused on automotive, engineering, defence, manufacturing, and electronics. The asset has also developed ties and collaboration schemes with local schools and colleges, including STEM and innovation programmes.
CPP Investments and Federated Hermes, as investment manager of BTPS’s UK property investments, have previously co-invested on the development of other MEPC managed assets in Paradise Birmingham, Wellington Place and Milton Park.
Chris Taylor, CEO real estate, Federated Hermes, said: “This is a noteworthy extension of our highly successful partnership with CPP Investments. Our vision for Silverstone Park is to build on the history, heritage and global reputation of the Silverstone Circuit, creating a home for engineering, innovation and business development beyond the world of motor sport, and we are delighted to share these aspirations with our joint venture partner.”
Tom Jackson, Managing Director, head of real estate UK, CPP Investments, said:
“We have successfully partnered with Federated Hermes on several projects in the UK, investing in long-term development projects in growth locations across the UK, where access to talent and innovation is strong, including Birmingham and Leeds city centres, Milton Park and now Silverstone Park. We believe our investment in Silverstone Park will support the scheme’s next phase of growth, further diversify our real estate portfolio and deliver attractive long-term, risk adjusted returns for CPP contributors and beneficiaries.”
New ambition set to launch conversations about the future of Derby City Centre
As part of the city’s recovery from the COVID-19 pandemic, and to meet the challenges of the 21st century, Derby City Council has created a new ambition document which outlines ideas for a bold, transformational vision for Derby city centre.
The new document sets out ideas and ambitions for the city centre to inspire a conversation with the people of Derby to share their own ideas. These conversations will be the basis for a new city centre consultation, if approved by Cabinet members at May’s special Cabinet. The proposed conversations will initially run for 12 weeks.
The vision will focus on longer-term ideas and interventions that will transform the city centre and secure its future as a vibrant place that people can feel proud of and want to visit. It will recognise the challenges facing all city centres, not just Derby, and provide an over-arching ‘direction-of-travel’ that will inform future plans and actions.
Officers have spent some time engaging with key stakeholders and seeking to learn from best practice from across the UK. This has included visiting comparable cities where regeneration activity has led to successful transformation and speaking to those responsible for both planning and delivery.
Cllr Steve Hassall, Cabinet member for regeneration, decarbonisation, strategic planning and transport, said: “We want to have a conversation with Derby residents, businesses and stakeholders about what they want Derby to be in the future. Our aim is to produce an exciting vision for the future of Derby city centre, supported by a robust delivery plan.
“Whilst we need to take urgent action now to deal with the immediate challenges and the impact of the COVID-19 pandemic, we also need a longer-term plan that addresses the structural issues that face the city centre, of which can’t be solved overnight. This ambition document is unique and outlines possible ways we can transform Derby and create a successful city vision.
“We aim to achieve this by working closely with our Team Derby partners and to get a greater understanding of what our residents and businesses would like and need to see in their city centre. These conversations will be the first step towards creating a new vision which will restore its position as the heart and soul of Derby.”
This is the first time a city-wide future regeneration conversation has taken place since the creation of the City Centre Masterplan in 2016, which has brought about exciting developments including the Our City Our River project and the Becketwell development. However, the vision will be distinctly different to previous masterplans, setting out overarching principles and a framework within which more detailed plans and strategies can be developed.
Conversations around the ambition will inform the development of the new City Centre vision, which is due to be published in 2023.
The report will be discussed at Cabinet next Wednesday. If approved, the consultation will commence at the end of the month on the Let’s Talk Derby website. The conversation will initially last for 12 weeks over the summer for residents to share their ideas and give feedback.
Works complete at new £10m manufacturing facility in Mansfield
Midlands contractor G F Tomlinson has announced the completion of a new light manufacturing facility on Hamilton Way, Oakham Business Park, Mansfield.
The £10million scheme sees the construction of a two-storey facility and basement space for a UK leading aerospace manufacturer based in the East Midlands.
The 80,000 sq ft steel frame building features composite insulated cladding to the walls and roof to provide a production facility and headquarters comprising a ground floor with workshop, office and meeting spaces, including staff facilities and a basement level for storage.
Adjacent is an external service yard with two artic loading bays and car parking spaces over three levels for 139 cars. Five gabion retaining walls are also in place across the site – totalling 170 metres in length with a height of 1.2 metres.
As part of the project G F Tomlinson also carried out £3million M&E works, and worked alongside project manager and principal designer Jackson Design Associates and Webb Gray Architects – both firms the contractor has worked with previously on office and industrial schemes elsewhere in Mansfield and in Lichfield.
Chris Flint, Managing Director of G F Tomlinson, said: “We are very pleased to have completed construction works for this impressive industrial facility in Mansfield, which has been designed to meet the end user’s growing manufacturing ambitions, storage and office requirements.
“It is a pleasure to have worked once again with Jackson Design Associates and Webb Gray Architects – two local businesses which each have a wealth of experience in the Midlands region and in this sector.”
David Grieves, senior project manager at Jackson Design Associates, said: “It’s great to see this project completed. The collaborative working relationship with G F Tomlinson helped overcome challenges along the journey, resulting in a successful project delivery. The client can now enjoy the impressive internal space for what they do best.”
East Midlands’ small business confidence remains steady despite challenges
The latest Federation of Small Businesses (FSB) Small Business Index is out, and despite a challenging economic environment, business confidence in the East Midlands remains stable, indicating that the stark dips of 2021 caused by changes in lockdown restrictions are finally settling.
Confidence amongst small business owners in the region has remained stable in Q1 at 17 per cent, a slight increase from 15 per cent in Q4 of 2021. However, growth and investment intentions have declined, signalling that for many small businesses their focus is still very much on recovery.
Despite tough trading conditions in which East Midlands small business owners have seen decreases in their net profit, just over half (52%) increased average salaries demonstrating they are doing all they can to retain staff during these challenging times, where interest rate increases, inflation, and rising costs of doing business are taking a toll.
Other key headlines from the report are:
- Although sentiment appears to have stabilised this quarter, compared with a year to date, confidence is much lower.
- With a net balance of 9% across the East Midlands for Q1 2022, the region has reported a decline in terms of net revenue (16% at Q3 2021).
- The employment picture amongst FSB members in Q1 2022 showed that 11% had decreased staff numbers, with the same proportion also increasing staffing levels – leaving an overall net score of 0% for employment in the region.
- In the East Midlands, 52 per cent of small businesses increased the average salary awarded across the business over the last 12 months; with 49 per cent doing so by two per cent or more.
Two regionally significant strategic land agreements completed in Nottingham and Lincolnshire
National property consultancy, Leaders Romans Group (LRG) has completed two regionally significant strategic land agreements in Nottinghamshire and Lincolnshire.
LRG’s land team, on behalf of private landowners, has overseen the sale of a 47-hectare site for a housing-led mixed-use development to Barratt Developments plc North Midlands and a 64-hectare site for large-scale strategic storage and distribution to Caddick Land.
Barratt Developments’ new site, which has the potential for 1,000 homes, forms part of a 3,000-home sustainable urban extension to Nottingham.
Caddick Land’s site is on the A1 in Lincolnshire, ideally located for the burgeoning storage and distribution market which is increasingly attracted to this area because of its excellent transport links and abundant labour market.
In both cases, LRG worked with its subsidiary planning consultancy, Boyer. For Barratt Developments, Boyer will lead on the promotion through the Greater Nottingham Plan. Boyer will perform a similar role in relation to Caddick Land’s scheme as the Local Plan approaches its Review stages. LRG will provide a New Homes service for Barratt and another of its sister brands, Dunlop Heywood, will act for Caddick in a commercial agency capacity.
David Hutchinson, land & planning director for the Midlands region, said: “The East Midlands strategic land market remains extremely active, as these two recent contracts demonstrate. Despite geopolitical uncertainty, build cost inflation and interest rate rises, we are seeing long term commitments to strategic land across the region and no sign of a let-up.
“Leaders Romans Group is committed to growth in the Midlands. We are pleased to be capitalising on the strength of the strategic land market in bringing forward commercially attractive land opportunities with a focus on securing best value for our landowner clients while delivering the economic benefits the region needs to support its communities.”
