Small business owners to back Conservative Party in June
02 May 2017
Small businesses are three times more likely to vote Conservative over Labour in the upcoming General Election, according to one of the largest small business surveys* carried out by Funding Circle, the leading direct lending platform for small business finance.
- Small business are three times more likely to vote Conservative over Labour
- 40% say tax is the most important policy area, with many highlighting business rates
- Small businesses remain highly optimistic, with two-thirds (68%) expecting turnover to increase and more than half (55%) expecting to hire at least one new full-time staff member within the next 12 months
Despite 49% saying they voted Remain** in last year’s EU referendum, the majority now have confidence in the Conservative Party to deliver Brexit.
Tax is by far the most important policy area for small businesses during this election, according to 40% of respondents. The reduction of business rates was referenced close to 300 times when asked what business owners would like to see the next Government do following the election. The second most important issue is of course Brexit (26%).
Launched in 2010, Funding Circle facilitates lending to small businesses directly from a wide range of investors, and is now one of the largest sources of finance on a net basis in the UK. In Q4 2016, investors at Funding Circle did nearly as much net lending to small businesses as the entire UK banking system, according to Bank of England data.***
The research also found small businesses are going for growth, unfazed by the uncertainty caused by recent macroeconomic events. Nearly 70% of UK small businesses expect their turnover to increase within the next 12 months – half of whom expect a steady increase of between 6 and 20%. Only 6% expect turnover to decrease.
Funding Circle’s Co-Founder and UK Managing Director James Meekings said: “It is heartening to hear that small businesses are optimistic about the next 12 months, despite the uncertainty caused by Brexit and a snap general election. Future UK prosperity depends on small businesses, as they provide much needed job creation and economic growth. This is why access to finance is crucial.”
More than half (55%) are planning to hire at least one new full-time member of staff over the next year, supporting the creation of up to 3 million new jobs.****
Investors at Funding Circle include 60,000 individuals, local and national government, the European Investment Bank and financial institutions such as pension funds. By opening up small business lending to a wide range of investors, Funding Circle has improved competition in the market, supported job creation and reduced small business dependency on bank lending. To date investors have lent £2.2 billion to more than 23,000 UK small businesses. Businesses funded through the platform typically access the capital they need in seven days, and independent research found that 94% of businesses would come back to Funding Circle first in future.*****
Notes to editor:
* The online survey was sent to UK small businesses that have either borrowed through Funding Circle or expressed an interest. The average business that Funding Circle markets to has been trading for 9 years, has a turnover of ~£200,000 and employs 8 members of staff. The survey was undertaken between 21 and 25 April, and 2,300 responses were received.
** 49% of small businesses were in favour of remaining a member of the European Union whilst 41% would have preferred to leave, 5% preferred not to say and 4% did not vote.
*** Data taken from Bank of England ‘Bankstats (Monetary & Financial Statistics)’ – Table A8.1 ‘Monetary financial institutions’ loans to non-financial businesses, by size of business’ under ‘Net Lending’. 22 Banks’ combined net lending for Q4 was £224m, whilst Funding Circle investors’ was £167m.
**** There are 5.4 million small businesses in the UK, according to latest Government estimates. Should 55% of these businesses go on to hire at least one new member of staff, an estimated 2.9 million jobs would be created.
***** ‘Small Business, Big Impact’ research commissioned by Funding Circle from the Centre for
Economics and Business Research, August 2016.
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Funding Circle (www.fundingcircle.com) is the world’s leading direct lending platform for business loans, matching small businesses who want to borrow with investors who want to lend in the UK, US and Europe. Since launching in 2010, investors at Funding Circle – including 65,000 individuals, local and national government and financial institutions – have now lent £2.8bn to 30,000 businesses globally. Approximately 10% of investor money now comes from Government sources, including the British Business Bank, European Investment Bank, KfW, the German government-owned development bank, and local councils across the UK. The business has raised £250m in equity capital from the same investors that backed Facebook, Twitter, Airbnb and Wealthfront.