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Business 'Growth Pioneers' Are Leading The Way To Economic Recovery, Says HSBC

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Growth pioneers are taking control of the future of British business and steering the country towards recovery, according to a report from HSBC.

The Growing British Business report, which surveyed 500 UK business decision makers between 17 and 25 August 2012, found there were three types of leaders who were making their own opportunities for growth.

They are:

New Exportentials - those making export-led recovery a reality

Co-operationals - creating formal and informal alliances and partnerships based on mutual strengths to get ahead and

Confident Capitalisers - who are investing despite the downturn so they can outstrip their competitors

Steve Box, HSBC's head of trade and receivables finance in the UK, said: "British businesses getting on and growing despite the economic downturn.

"These inspirational business leaders hold the key to trading the country out of recession and are using smarter finance solutions and innovative thinking to strengthen both their position and that of the future UK economy."

Other statistics showed 60% of businesses expected to grow in the next 12 months and 87% said they had found unexpected benefits from the economic crisis.

Lash Saranna, managing director at Autobahn International, told the report's authors: "It would have been easy to just throw my hands up in the air and give up… I threw out my old business model turned a domestic company into an international business and found a way back to profit and growth."

Interestingly, financial decision makers were more bullish than business leaders, with 78% of them believing they will grow in the next two years, compared to 60% of all business leaders and 58% of them predicting their exports will grow in the next five years, compared to just 38% of all business leaders questioned.

top strategies for growth

Infographic showing the top strategies employed by business leaders for growth - Source: HSBC

The report also reveals that growth pioneers tend to be regionalised; Newcastle, Bristol, Liverpool and London are fostering the most growth pioneers, with Manchester, Cambridge, Birmingham and Aberdeen predicted to be the next power four.

Manchester was picked for investing in infrastructure, Cambridge for building its reputation as a high-tech hub, Birmingham for success with the largest concentration of businesses outside London and Aberdeen was chosen as a new centre for energy.

Box said HSBC had put an extra £1 billion into funding SMEs as part of the International SME Fund and that in 2011, HSBC’s trade finance lending to underpin exports rose by 87%.

"Growth pioneers have put smart finance practices at the heart of their success and we continue to work in partnership with forward-thinking companies to capitalise on the positive trends this report unveils," he added.

growth pioneer city hubs

Infographic showing the city hubs for growth pioneers - Source: HSBC

However, the report arrives on the back of figures from the Bank of England showing the lending to businesses had fallen by £2.2 billion in August 2012.

Overall business lending shrank 3.1% in the year to August, with loans to smaller firms shrinking since June last year. Smaller businesses “continued to report they were unable to obtain credit”, although lenders continue to claim demand for loans is low.

John Walker, national chairman for the Federation of Small Businesses, said: “We know around four in 10 firms that apply for credit are refused, so it is unsurprising that lending to businesses has fallen. While the Funding for Lending Scheme will not have had much impact, we would have expected to see the National Loan Guarantee Scheme increase the lending available.

One SME founder told business intelligence database DueDil that it was forced to turn to a crowdfunding website last year to secure the funding he needed after HSBC made the process and conditions "highly complicated and so rigid that I simply got fed up with reasoning with them".

"We are a small, fast growing print and lamination business and have grown at a rate of 40% annually since our establishment in 2003," the founder told DueDil.

"When looking for growth financing, our bank at the time - HSBC - made the process and conditions highly complicated and so rigid that I simply got fed up with reasoning with them since the only thing they wanted to see was 'meat on the bone', profits, debentures, etc.

"This was despite my immaculate financial management history with them and meeting all of our previous financial responsibilities since the business's creation."

At a banking conference earlier this week, Sir Philip Hampton, chairman of the Royal Bank of Scoland group, told the audience that 85% of SME loans applied for with his bank were approved, but the 15% who didn't "get to the media and are understandably upset".

Do you believe banks are really lending to SMEs? Tell us your thoughts below.

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Filed by Charlie Thomas