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In Focus Risk
SMEs in need of a fi nance boost
Britain’s fastest growing small businesses in urgent need of fi nance
Jo Morris
Head of insight, Novuna Business Finance
Seven in 10 small businesses (70%) that predict signifi cant growth in the next three- months say they will have to put plans on hold if they were unable to secure fi nance. Access to fi nance and borrowing is also
urgently needed by small businesses most aff ected by COVID – those that either had to close or repurpose their ventures last year. The new research from ourseves at
Novuna Business Finance underlines how important access to fi nance is for the small business sector at a pivotal time for the economy – with many trying to rebuild after the pandemic in the face of spiralling infl ation and price rises. Overall, 55% of small business leaders
cited growth plans that would not be possible if they were unable to secure fi nance. The need for fi nance correlated with
businesses that were more likely to be planning growth – 70% for those predicting signifi cant expansion, compared to 61% that predicted modest growth and 47% the predicted no growth. The need for fi nance was also greater for
enterprises that had seasonal peaks during the summer (67%) and it was also regarded to be vital by those enterprises that had been most aff ected by the pandemic. Nationally, a total of 74% of small
businesses that had closed their doors during lockdown needed fi nance to power current growth plans. The same was true for 69% of business
owners that had re-purposed their business during lockdown and 57% of those that had adapted to a remote or home-working routine.
June 2022
Looking at the specifi c challenges small business owners would face if they were unable to secure fi nance, the representative poll of 1,196 business owners revealed that hiring people would need to be put on hold. This has become a bigger issue in the last 12-months and compared to pre-pandemic years, rising from 21% to 32%
Which specifi c growth plans are at risk? Looking at the specifi c challenges small business owners would face if they were unable to secure fi nance, the representative poll of 1,196 business owners revealed that hiring people would need to be put on hold. This has become a bigger issue in the last 12-months and compared to pre-pandemic years, rising from 21% to 32%. Investing in IT and modernising tech equipment would also be put on hold without fi rst securing fi nance. This has almost doubled since pre-pandemic years (up from 16% in May 2018 to 30% this month). The importance placed on enterprise
modernisation is perhaps a symptom of the big shift to the online world during the lockdown era – and is forcing many small businesses to invest to tech in order to keep up with the pace of market change.
www.CCRMagazine.com
Compared to 12-months ago, more small businesses said they needed funding to support new product development (29%) and marketing campaigns (27%), whilst 21% said they needed fi nance to purchase new machinery. Across nine UK regions, the need for
fi nance from small businesses has increased on last year. Regionally, enterprises in the North West and Wales were most reliant on fi nance to secure growth (62% each), followed by small businesses in London (60%). The biggest year-on-year rise in the need
for fi nance was among small businesses in the North East. By industry sector, there were also signifi cant rises in the reliance on fi nance in manufacturing, construction, transport and media. It is remarkable that so many small
businesses have set out growth plans for 2022, given today’s volatile market conditions and the severe challenges so many faced during the lockdown era. Whilst at face value this is most welcome news – the sector’s reliance on fi nance to secure growth is a critical issue that must be tackled. It is also noteworthy that those enterprises expecting to expand the fastest are also those most in need of fi nance to support this. We are serious about helping the sector.
With an asset portfolio of more than £1.4bn, our simple and competitive funding is designed to fi t around the needs of small businesses, helping customers to buy or lease business assets. With an expert team and award-winning services, we can provide access to the fi nance solution our customers need, helping them to develop and grow. CCR
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