With new Paragon research finding that transport SMEs are set to increase investment Dale Trenam, Paragon's Head of Transport Finance, reflects on the research and the new report An SME Led Recovery. 

When the UK economy returns to growth, it will be thanks to the dedication and skill of SMEs – and transport SMEs are set to play a vital role in this process.

Following the challenges of recent years, transport SMEs are preparing for the future. New polling commissioned by Paragon Bank, where I am Head of Transport Finance, and conducted by Opinium has identified the proactive steps businesses are taking, providing a behind the scenes look at what is in store for the sector.  

Published in our new report, An SME Led Recovery, the data finds that transport SMEs are confident, investing and looking to the future – creating the conditions necessary for the economy to bounce back.

When asked about the prospects for their business, over half (55%) said they were confident, compared with only 15% expressing concern. This confidence feeds through into their expectations for the wider sector, with 58% responding positively and just 13% with a negative opinion.

The confidence of SMEs is backed up by their anticipations for cashflow improvements. While only 23% said that their current cashflow was better than it was three months ago, with 31% saying that it’s worse, this is set to substantially improve across the coming year – with 45% expecting increases over the next three months, followed by 49% over the next six months and 51% across the year.

Backed by improved cashflows and confidence, transport SMEs plan to increase investment so that their operations are ready to capitalise on forthcoming opportunities. 

Nearly a third (29%) of all firms surveyed are planning to increase investment in the next six months, with over half (55%) plan on maintaining current levels, with only 13% expecting it to decrease over the same period.

Over the last six months 18% of all transport SMEs invested in electric vehicles, but 53% plan on doing in the next six – the same percentage as those set to acquire new traditional powered assets, rising from 25% and 20% investing in HGVs and LCVs respectively.

The number of full-time staff working in our sector is also set to improve. During the last six months, 20% of SMEs increased their work force, but this is now set to rise to 29% over the next half a year.

With the positive news that transport SMEs are planning to invest and grow their operations, it is vital that they can access the funding they need to achieve their goals and fulfil their role in driving forward economic recovery.

As SME lending specialists, the Paragon team works with businesses daily – providing us with a first-hand understanding of not only the sector, but also the requirements of individual businesses. By doing so we can develop bespoke deals to ensure that transport SMEs can acquire the assets they need in a way that supports their growth plans.

After the challenges of recent years, we can now see the beginnings of economic revival and, as An SME Led Recovery shows, transport SMEs are ready to play a leading role.