UK SMEs 'could face even tougher year'

06/09/2010

The next 12 to 18 months could be even tougher than the last, according to the head of PricewaterhouseCoopers Scotland.

Frank Blin, executive chairman at the firm, told the Scotsman that the prospect of a fresh economic downturn is not out of the question yet.

"Clients have driven substantial efficiencies into their business but the search for top line growth will be challenging," he said.

He added that "funding will still be tight" in the small and medium-sized enterprise sector, as well as the mid-market segment of the economy.

Recently, the Bank of England's Trends in Lending report revealed lending to SMEs fell in June, showing credit conditions are remaining difficult for small firms.

Loans to SMEs dropped by two per cent compared to the same month last year, while the new repayment figure for June was £3.5 billion, which was higher than the £2.2 billion in May but still below last year's average.

Posted by Nicola Richards