Pessimism prevails for SMEs

The mood of small and medium-sized UK businesses has become distinctly gloomy in the past six months, according to the latest Bowmark Entrepreneurs’ Index.

The Optimism Index, which tracks how positive respondents are about their businesses revealed there has been a drop by nearly 10 points to 66.7 since the first survey was published in January. Their optimism regarding UK entrepreneurial businesses has tumbled 13 points to 49.7.

Bowmark Capital’s managing partner, Charles Ind said: “The outlook for the economy in the next six months is more uncertain than at any time in recent history. Entrepreneurial company directors, normally more positive than most, have become increasingly apprehensive and cautious in their approach.”

In the latest survey, 29% of respondents said that banks were offering them worse terms to fund acquisitions than six months ago. However, it’s not all doom and gloom – companies still have a strong financial base; 98% were having no problems servicing their debt in spite of the downturn in their optimism, past performance and prospects.

The Bowmark Entrepreneurs’ Index is a survey of the directors of small and medium-sized businesses in the UK commissioned by Bowmark Capital, the mid-market private equity firm. Apart from respondents’ levels of optimism, the survey tracks their financial performance and prospects, corporate activity, and attitudes to the challenges and opportunities they face in the current economic state.