2014 saw the biggest increase in cashflow at small businesses since the turn of the century, but the UK’s recovery is yet to manifest evenly throughout the country.
An index tracking payments to small company bank accounts at Barclays recorded an 8 per cent rise, the Financial Times reported, showing that the UK’s economic recovery is finally trickling down to small businesses.
Barclays tracks the value of payments coming into 600,000 of its small business customer’s current accounts. The index, which is seasonally adjusted and smoothed to account for short-term volatility, has risen by a fifth since 2000.
The biggest increase in the last year came from property, accommodation and construction companies, but companies in the transport, agriculture, information and manufacturing increased more slowly than the national average. Outperforming sectors included education, health, professional services and the arts.
The UK’s financial recover is yet to manifest itself evenly, with small businesses in London increasing their cash flow at a rate that was twice as strong as in Wales. Companies in the south west, north west and Yorkshire grew their cash faster than the national average, while the east of England, west midlands and north east were below average.
While banks have been under fire for refusing to fund enough small business ventures, the Bank of England published data this week showing that small business lending had increased by £286 million in November 2014. This is the biggest increase since records began in 2011.
Lending to non-financial small businesses declined 2 per cent in the year to November, the lowest fall since records started in 2012.
Alternative financial services such as crowdfunding and peer-to-peer lending platforms have also encouraged lending to small businesses.