The SME market has grown by 4%, according to latest government statistics.
The Department of Trade and Industry (DTI) revealed there were an estimated four million SMEs in the UK at the start of 2003, compared with 3.8 million at the start of 2002, a rise of 4% and the biggest year-on-year increase since records began in 1994.
But the DTI admitted part of the rise was due to a revision in the Office for National Statistics' estimates of the number of self-employed in the UK, contributing 70,000 to the increase in the number of SMEs.
Almost all (99.2%) of these companies were small (49 or fewer employees), with 0.6%, or 26,000, companies classed as medium sized (between 50 and 249 employees).
Only 0.2%, or 6,000, of the firms were classed as large SMEs, employing 250 or more people.
Small enterprises alone accounted for 46.2% of UK employment and 38.3% of UK turnover.