UK SMEs have ambitious expansion plans in their sights amid renewed growth and confidence

UK small and medium-sized enterprises (SMEs) are setting their sights on ambitious growth plans after a year of strong performance, according to a recent survey from Shawbrook.

The survey, which focused on companies experiencing growth, found that 44% of these small and medium-sized companies are considering an initial public offering (IPO) within the next five to 10 years. This wave of optimism is also fueling plans for mergers, acquisitions and regional expansion.

With 46% of all SMEs reporting growth in the past year, the sector is experiencing a rise in confidence, with 86% of respondents optimistic about the year ahead. It is striking that 27% of business leaders indicate that they have extremely high confidence in the future.

The research shows that nearly half of financial decision makers and entrepreneurs surveyed are exploring a range of strategic growth opportunities. In addition to IPOs, 41% are considering acquisitions, and 42% view mergers as important opportunities for expansion. Internally, 52% of SMEs focus on team growth, with a strong focus on upskilling existing staff and expanding leadership teams.

Investing in people remains a top priority, with 53% of companies planning to hire new employees and 50% aiming to upgrade the skills of their current workforce. This internal growth strategy is seen as essential for maintaining the momentum resulting from recent successes.

Financial planning is also on the agenda: 45% of small and medium-sized businesses that have seen growth in the past year are planning their next round of financing within the next five to ten years. Additionally, 51% are preparing for significant capital expenditures, and 49% are considering applying for new loans or financing lines to support their growth ambitions.

Neil Rudge, Chief Banking Officer, Commercial at Shawbrook, commented: “Stronger economic conditions are fueling a new wave of growth for SMEs. Our research shows renewed confidence after a challenging period, in which business leaders drew up ambitious plans. This increase in activity is in line with the discussions we are having at Shawbrook and reflects the optimism in the UK economy. Building a strong partnership with a committed lender is critical for SMEs. When lenders take the time to truly understand their business, financing becomes a strategic tool for success, not just a transaction.”