Small firms would hire more than 500,000 new staff if they could get more cash from banks, according to new research.
Yet 30% of small businesses have had to lay off staff as a result of a lack of funding and the economic crisis.
The first quarterly Funding for Growth study conducted by Funding Circle, found that 33% of small firms would increase staff numbers if they could obtain finance, while 31% would seek to grow their business more generally.
Businesses that would increase staff numbers would do so by an average of 12%. With SMEs responsible for employing approximately 13.8 million people in the UK, improved access to finance for the 1.5 million ‘Caged Tigers’ could unlock more than 500,000 new jobs and drive down unemployment to pre-recession levels. This month’s official ONS figures show that unemployment dropped by just 7,000.
“With the right support, these frustrated businesses could be the future drivers of our economy, with the ripples of job creation being felt throughout UK industry,” said James Meekings, co-founder of Funding Circle.
“Not only would the economy feel the direct impact of a boost in employment, but a quarter would also use finance to increase stock, supporting businesses throughout their supply chain.
“Instead, they risk becoming a lost generation of ‘Caged Tigers’ stifled by a lack of business finance.”