Confidence in the future of the UK economy remains mixed among commercial finance brokers, research by Asset Advantage has found.

The SME funding provider’s latest survey found that 49% of brokers remain neutral on the outlook of the economy in the next 12 months, while 28% hold a pessimistic view.

More than 20% said they feel optimistic about the UK economy in the coming year, but Asset Advantage said the results highlight the mixed feelings among brokers as businesses weigh up investment decisions around wider market and economic headwinds.

As part of the survey, commercial brokers pinpointed a range of pressures impacting economic prospects, including Government taxation, business confidence, increasing operating costs and inflationary pressures.

One broker stated "cashflow and uncertainty" as key issues, while another said that inflationary pressures mean businesses make lower profit, affecting their serviceability and ability to borrow.

However, separate research from Asset Advantage found that commercial brokers are still "broadly positive" about their business prospects in the next 12 months, as they expect strong demand for both asset finance and business acquisition funding among small and medium-sized enterprises.

Sales director at Asset Advantage, Gary Thompson, said: "While there’s still very much strong demand for business funding, there’s no doubt that many businesses are feeling cautious in the current climate.

"Big factors such as higher operational costs, inflationary pressures and both geopolitical and economic uncertainty all continue to have an impact on business confidence and influence borrowing and investment decisions.

"Against this backdrop, the case for flexible funding options from pragmatic and forward-thinking funders becomes ever clearer. Working with expert commercial brokers, specialists funders who are willing to support complex, growth-focused deals will be key to giving SMEs the confidence they need to push ahead with their expansion plans."

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