Much of Europe remains in recession and 59 per cent small and medium sized companies across the globe are either watching revenues remain static or decrease. In that context you would expect unemployment to be a serious issue.

While it is still a challenge, despite a few exceptions such as Spain where youth unemployment has hit 55 per cent, it seems jobs are being created or maintained. For example, the results from the latest Sage Business Index found in the UK the number of people out of work fell by 37,000 to 2.49 million in the three months to November 2012.

This is in no small part a result of the thousands of SMBs in Europe – which make up 99 per cent of the economy – keeping the job market buoyant. In fact, 82 per cent of businesses have maintained or grown their employee base. Over half (57 per cent) have seen staff levels stay the same and a quarter (25 per cent) have increased their number of employees. Just 15 per cent had laid people off over the six months to October 2012.

The top three countries that have reported most growth in employment are Malasia (40 per cent), Austria (39 per cent) and Brazil (38 per cent). Meanwhile, Spain (26 per cent), Portugal (21 per cent) and Ireland (19 per cent) have laid off most people off.

Globally, a third (33 per cent) of small and medium sized companies say that having a skilled workforce to recruit from is one of the most favourable aspects about their country as a place to do business. Interestingly, this rises in those countries that have experienced most economic woe including Ireland (63 per cent), Spain (42 per cent) and Portugal (39 per cent).

What is even more encouraging is that when asked what they plan to do in the next year, a fifth (20 per cent) of SMBs globally said they would recruit new employees. This rises to 40 per cent in Brazil, 33 per cent in Austria and 27 per cent in Germany. Just five per cent of Spanish, seven per cent of Portuguese and 14 per cent of French small and medium sized companies said they would recruit new employees in the coming year.

As 2013 gets fully underway, it looks like SMBs across the globe are boosting employment levels and keeping people in work. This is vitally important – from an economic and social point of view – and ensures skills can be retained in companies for the recovery.

The UK government has announced the first stages of creating a government-backed business bank.  “Not another scheme” has been the cry from some SMBs.  But on closer examination, could this be the break small to medium sized businesses have been waiting for?

The Department for Business, Innovation and Skills has said that – when fully operational – the fund could provide up to £10 billion new and additional business lending through both government and private sector funding.

Supporters of this new approach claim that this is just the support SMBs need – a scheme effectively forcing lending to small to medium sized businesses,that are the backbone of our economy. 

Critics have said that this adds to an already confusing and unclear business loan landscape coming within months of the government’s ‘Funding for Lending’ scheme, to name one example.

The Business Secretary has also announced the launch of a £60 million pot of Regional Growth Fund investment and bank finance at the Community Development Finance Association’s (CDFA) annual conference.

UK SMBs are not alone in their plea for smoother access to funding.  It seems the EU is listening; European businesses will potentially benefit from relaxed rules for small business loans. 

Conservative MEP and Economic and monetary affairs committee member Vicky Ford has said that capital requirements imposed on banks for business loans may be reduced – this is a deliberate step to shift European banks’ viewpoint that business loans are costly to provide.

There are clear and visible attempts by national governments and the EU to oil the wheels of business funding.  Most SMBs would agree that anything that removes barriers to sensible and fair lending is a positive step – but will the UK and EU steps go far enough?

Join the debate #SageBI.

While every business is unique, there are common threads running through all companies.  One such thread is the drive to be well organised so essentials are dealt with, leaving business owners the time to focus on moving their business forward. 

The challenge is that there is inevitably something that steers business owners away from their priorities – and often this ‘something’ is identified as red tape.

In the 2011 Sage Business Index the role of government featured heavily – over half of small business surveyed put government bureaucracy and legislation as the least favourable aspect to doing business in their country. 

We spoke to Simone Clarkin, just one our 6 million customers throughout the small and medium business sector.  Simone is the owner of Newcastle based deli Mmm… and we asked for her thoughts on the impact red tape.

“There’s a lot of bureaucracy and red tape involved in being a small business and it takes a lot of time out of your day to cope with that.  It does take a lot of time when it would be nice to be spending time actually dealing with customers and looking for new products, rather than spending time doing ‘back room’ stuff.”

Governments have said concerted efforts have been made – and more are planned – to reduce red tape in a drive to help businesses grow.  These commitments include the Canadian ‘Red Tape Action Plan’ and a pledge by UK Business Secretary Vince Cable to scrap hundreds of thousands of regulations. 

The pledges follow research that is consistent in showing the impact bureaucracy can have on business; Canadian Prime Minister Stephen Harper has called excessive regulations and paperwork “a silent killer of jobs”. 

Mirroring this sentiment, the Australian Chamber of Commerce recently released statistics showing that 72% of businesses are spending more on regulation than they were two years ago.  The report says nearly 40% of businesses surveyed take more than 5 hours each week completing regulatory paperwork.

Join the debate #SageBI.

With the current Economic outlook, it’s not a surprise that small and medium sized businesses are finding it increasingly difficult to obtain finance. The willingness of banks to provide loans lowered significantly towards the end of last year compared with the previous six months, as found by a survey carried out by the European Central Bank. These stats were backed-up by the fact that there were also an increased number of small companies which cited access to finance as their most pressing problem.

However, NYSE Euronext has come up with a solution that is designed to encourage small and medium sized business back to equity markets. It recently announced that it is planning to launch a new Europe-wide stock exchange for entrepreneurs to help with funding issues. The exchange, which means a complete restructuring of the market, aims to make it easier to raise money for companies from investors and lower costs and existing obstacles that are currently preventing smaller companies listing shares.

The findings from European Central Bank mirror the results found in the last full Sage Business Index, which revealed that 17% of small companies expressed that funding was a top concern in relation to what is affecting their business. Similarly, this figure increased over the next six months to 20%.

With concerns for funding still prominent in the market, the latest attempt to boost corporate growth following the financial crisis can only be welcomed. In order to make it a success, the new exchange needs to have a large number of listed companies at launch. It will be interesting to see how this attempt pans out and is definitely something to look out for in the future.

Whilst Microfinance has predominately been limited to developing countries, the European Commission recently announced that this is no longer the case.  The second annual report proves that the European Progress Microfinance Facility has been a successful tool and as a result we are starting to see more and more citizens in the EU using the scheme.  Since it was launched in 2010, it has been in place to create valuable opportunities for SMB, entrepreneurs and start-ups.

 And there is no better time than now to embrace such a scheme. With the current climate, now is the time where many entrepreneurs/SMB start-ups could do with a helping hand especially with banks taking fewer risks.  With loans of up to €25,000, people wanting to set up a small business are able to receive the backing they need, taking away the pain of fighting for funding.

 Not only is this good for the economy, but also allows for jobs to be created for people who are deemed as being more risky such as young entrepreneurs who lack experience.  In total, the scheme aims to generate a total loan volume of €500 million for 46,000 micro-borrowers across Europe until 2019.

 Successful projects include a young Portuguese waiter who was able to start his own restaurant in the South of Portugal thanks to a microloan and a Romanian couple who, after losing their jobs in a mining company, successfully started a farm.

 With the present Eurozone crisis as it is, what Europe needs are people who are determined to survive and fight through.  These kinds of schemes help willing and innovative people start their own businesses, drive wealth and bring new ideas to the market, which can only be a great boost to this struggling economy.