2024 – Signs of economic recovery but still reasons to be cautious

In an era of rapid technological innovation and unprecedented opportunities, the financial landscape for SMEs is evolving at breakneck speed. While 2024 is shaping up to be a banner year for startups, with record numbers of new ventures emerging across the UK, there’s one subject that goes beyond the excitement of entrepreneurship and delves into the challenges that lie ahead for SMEs and lenders

Firstly, we kick off the conversation with a new initiative that has been making headlines, and it’s the SME Finance Taskforce’s coalition plan .

The plan is based on a report from the Centre for Finance, Innovation, and Technology (CFIT), and a key objective is exploring how smart data can be used to unlock better lending options for SMEs. The Taskforce is hoping that it will reshape how businesses access the financing they need. On the face of things, this could lead to greater choice for SMEs, when it comes to raising finance, possibly increasing the prevalence of Fintech lenders. However, will business owners see this use of shared Big Data across lenders, credit reference agencies and Government bodies such as HMRC and Companies House, as more like Big Brother?

Furthermore, as a lender, we place a large emphasis on the experience and character of directors, along with their future plans, when deciding whether to support a business, something that no amount of historic data can assess.

We’d love to hear your thoughts on this. The seemingly unstoppable advances in automation, and particularly AI, are going to continue to transform our lives, but is the SME community ready for, or even prepared to accept, this level of transparency? How far is this initiative expected go, in terms of open data and will it really benefit SMEs, as proposed, or just make it easier for lenders to assess potential new business opportunities? At Flex, we love the benefits of automation and all things digital, but at heart we still much prefer Human Intelligence to the Artificial kind.

Moving on to another big subject in the news, the UK is witnessing a promising upturn in entrepreneurship, with Beauhurst reporting that 2024 is seeing a marked increase in new business start-ups in the UK. With 468,000 new firms launched in the first half of the year alone, it’s clear that more people than ever are ready to take the plunge into the world of business ownership, which can only be good news for UK plc.

It seems, therefore, that business owners need someone in their corner more than ever. We set up FlexABL with a vision of being a lender that is easy to do business with, by creating a culture where business owners are respected and valued for the contribution they make to the UK economy. We spend time with our clients to truly understand their businesses, so we’re then able to deliver a bespoke, personalised service.  For the foreseeable future, we can’t see fully digital offerings replacing that level of relationship and communication.

Finally, let’s talk about the bigger picture. The UK economy, particularly the services sector, has shown impressive resilience despite the challenges faced. In July, we saw a notable uptick in activity, which is great news for the country. This growth suggests that there will be continued demand and opportunities for expansion. But let’s not get too comfortable – economic uncertainties still loom large, with Keir Starmer saying the financial situation the new Government inherited is “worse than we ever imagined” and stating that life in the UK is “going to get worse, before it gets better.” We await the October budget with interest.

In the face of continued general uncertainty, it’s more important than ever for business owners to have a secure and reliable financial partner. At FlexABL, we’re not just focused on the here and now; we’re looking ahead, helping our clients prepare for whatever the future might bring. Whether the economy is booming or facing headwinds, we can be counted on to provide our clients with the support they need.

So, if you are a business owner looking for a cashflow lender who understands the unique challenges you face, we encourage you to get in touch. We’re here to help you drive your business forwards and navigate ever-changing conditions and challenges.