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Resellers trying to encourage some IT investment from their SME customers might find it a harder battle with smaller firms as they start to batten down the hatches in response to growing uncertianty.
The impact of Brexit and a far from clear cut election result have left many small firms opting to reduce their exposure to external finance and focus more on self-funding.
The latest analysis of what has happened in Q2 according to the BDRC SME Finance Monitor reveals some segements of the customer base is struggling to deal with the ongoing lack of clarity around the future.
Larger SMEs remain a much better target for those resellers advising investment as they are much more likely to be prepared to seek finance to support business growth.
“There have been no dramatic market changes since the referendum. However there are signs in the first half of 2017 that larger SMEs, whilst concerned about the economic climate and political uncertainty, are looking to grow and to use finance more than before," said Shiona Davies, director at BDRC.
“For the smallest SMEs, the picture is slightly different," she added "Like their larger peers, many of them have made a profit and more of them are holding £10,000 or more in credit balances. However these sole traders have become less likely to be planning to grow over time and less willing to borrow to grow. They would be more likely to either self-fund a new business opportunity or turn it down because of concerns over getting into debt”.
The consequence of that risk adverse attitude is that many of the smaller firms appeared to be settling for a situation that meant they would have to accept slower rates of growth because it would be sustained by what they could afford themselves.
The channel is in a position to offer various forms of finance, from the schemes run by vendors to some of the specialist firms like Syscap and BNP Paribas, and the BDRC survey found that larger SMEs were much happier taking up one of those means of investing in growth.
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