The future’s bright for Yorkshire businesses, according to a leading insolvency expert.

Levels of UK business growth remain near their record highs with 65% of businesses reporting one or more key indicators of growth, figures from insolvency trade body R3 reveal.

Yorkshire firms were even more bullish with 85%, of businesses in the region reporting one or more key indicators of growth.

Across the region, 38% of businesses are reporting increasing sales volumes, 55% are investing in new equipment, 29% are seeing increased profits, and 49% of businesses are expanding.

Meanwhile, business distress levels in the region and across the UK are staying near record lows, the R3 data shows. The proportion of companies not reporting any key indicators of distress is 35% – down from 64% in March, 2012.

The R3 findings follow a poll commissioned by business funder Liberis and conducted by OnePoll which shows that 59% of Yorkshire’s small and medium-sized businesses are feeling confident about their business for the new year.

The survey of 1,000 small and medium sized UK companies also showed that 45% expect their business to grow, 34% expect it will stay the same while 21% expect their business to decline.

Some 22% said they would be looking for business funding in 2015 – with 49% of those planning to approach their bank for the cash they need, 22% saying they will use their savings and 18% opting to use alternative finance providers.

Top reasons for funding in the new year are to help grow the business and buy new equipment.

The cost of funding, not having to provide personal assets as security or give up a share of the business were the most important factors for SMEs when it came to funding choices.

Cash flow, costs eating into profits and maintaining financial stability were the top three causes for concern among the region’s businesses.

Liberis chief executive Paul Mildenstein said: “It has been a tough few years, so it’s heartening to hear that the majority of the region’s businesses are feeling positive about 2015, but it’s still a tough outlook for a considerable number.

Paul Mildenstein, chief executive of Liberis
 

“Getting working capital has been a struggle too, which has made it even more difficult for businesses to operate, so it’s encouraging that those who need funding feel confident that they will get it.”

Commenting on the R3 findings, Chris Wood, Yorkshire R3 committee member and partner at Clough Corporate Solutions in Cleckheaton, said: “This survey marks a year of record high signs of business growth and record low business distress.

“Signs of growth are starting to become more balanced, too. This time last year, many businesses were reporting increasing sales and new investment, but not increasing profits or business expansion. These latter two indicators have caught up.

“Hopefully, businesses will now be starting to really feel the benefits of economic recovery. Four out of five of our growth indicators have increased since the summer.”

Mr Wood said: “Businesses do need to be careful that they don’t run before they can walk. Cash flow can become an unexpected issue in recovery.”

Larger businesses across the UK continue to show more positive signs of growth compared to their smaller counterparts, the R3 survey revealed. Some 88% of larger businesses – those employing more than 250 employees – are experiencing one or more indicators of growth. That is up from 82% in June, 2014. However, just 46% of sole traders are seeing one or more positive indicators – down from 49% last June.

R3’s Business Distress Index showed that 16% of businesses in the region are experiencing decreased profits, 17% are seeing lower sales volumes and 3% have seen market share decline. Five per cent are making job cuts and 3% are regularly using their maximum overdraft.

Said Mr Wood: “Signs of business distress have remained very stable over the past year having tumbled before that. While most indicators are at a record low, which is very encouraging, there are still plenty of businesses affected. The 12% of businesses across the UK regularly using their maximum overdraft on a regular basis is equivalent to 206,000 businesses.”

Signs of growth continue to be uneven across the regions, with 71% of businesses in the North showing at least one growth indicator, only slightly behind the Midlands (74%) and well ahead of the 54% of businesses in the South.