UK SMEs eye ambitious expansion plans amid renewed growth and confidence

UK small and medium-sized businesses are targeting ambitious growth plans after a year of strong performance, according to a new survey by Shawbrook.

The survey, which focused on growth companies, found that 44% of these SMEs are considering an IPO in the next five to 10 years. This wave of optimism is also driving plans for mergers and acquisitions and regional expansion.

With 46% of all SMEs recording growth over the past year, the sector is experiencing a surge in confidence, with 86% of respondents expressing optimism about the year ahead. Notably, 27% of business leaders said they feel very confident about the future.

The survey found that nearly half of financial decision makers and business owners surveyed are exploring a range of strategic growth opportunities. Beyond IPOs, 41% are considering acquisitions and 42% are looking at mergers as key avenues for expansion. Internally, 52% of SMEs are focused on team growth, with a significant focus on upskilling existing employees and expanding leadership teams.

Investing in employees remains a top priority, with 53% of companies planning to hire new employees and 50% looking to enhance the skills of their existing workforce. This internal growth strategy is essential to maintaining the momentum gained from recent successes.

Financial planning is also on the agenda, with 45% of SMEs that have grown in the past year planning their next round of financing within the next five to 10 years. In addition, 51% are preparing for major capital expenditures, and 49% are considering applying for new loans or lines of financing to support their growth ambitions.

Neil Rudge, Chief Executive of Commercial Banking at Shawbrook, commented: “Stronger economic conditions are fuelling a new wave of growth for SMEs. Our research shows renewed confidence after a difficult period, with business leaders setting ambitious plans. This surge in activity is in line with discussions we are having at Shawbrook, reflecting optimism across the UK economy. Building a strong partnership with a dedicated lender is essential for SMEs. When lenders take the time to truly understand their business, finance becomes a strategic tool for success, rather than just a transaction.”

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