New research from the UK’s leading insurance premium finance company, Premium Credit, shows SMEs are increasingly optimistic as recovery from the impact of the COVID-19 pandemic builds.
Around two out of five (37%) expect revenue to increase over the next 12 months with 15% predicting increases of 10% or more. Just 26% believe revenues will fall over the next 12 months while 18% expect them to stay the same and 21% do not know what will happen over the next 12 months.
The main reason for growth in revenue is the general recovery from the impact of the COVID-19 pandemic cited by 58% of firms expecting growth while 35% say it will be driven by launching new products and 34% by entering new markets.
Among firms who predict revenues will fall in the next 12 months a third (33%) say they are still suffering from the impact of the pandemic while 32% say they have lost clients including ones which have gone out of business.
Premium Credit’s Insurance Index, which monitors insurance buying and how it is financed, found that SMEs are starting to run down the savings they have built up. More than a quarter (27%) of firms say their savings have fallen in the past 12 months while 20% say they have increased. Around one in twenty have no savings. Research2 last year found 7% of firms had no savings.
Owen Thomas, Chief Sales Officer at Premium Credit said: “Rising confidence among SMEs is good news but companies clearly still face a lot of challenges in the year ahead and many have depleted their savings as they start to invest.
“Premium finance is a very cost-effective way for businesses to buy insurance, and better manage their finances and cashflow by spreading payments. Our research shows nearly six out of ten SMEs use some form of credit to ensure they can still afford business-critical insurance.”
Premium finance companies like Premium Credit provide businesses and consumers with the ability to use a loan to pay for their insurance in monthly instalments. By managing insurance payments in this way, businesses and consumers can spread the cost of their insurance, rather than pay their premiums in one lump sum.