Current challenges around rising costs are expected to drive more than 40,000 SMEs1 to lean on finance providers to help support their businesses according to new research from fintech technology lender Nucleus Commercial Finance (NCF).
The study found that 15% of UK SMEs expect to need a loan to support the running of their business. While only 1% of self-employed people expect to have to go this route, it rose sharply to 16% among smaller businesses, employing between 50 and 249 workers.
After weathering the Covid storm, business uncertainty is back. Two-thirds (66%) of UK SMEs are concerned about the prospect of rising business costs over the next 12 months. Among small and medium-sized companies, this figure rises to 74%, with 29% of this group stating that they are very worried about the increase in costs during the next year.
For those companies that are in an uncertain financial situation, being able to access financing is crucial. However, only 38% of businesses say they are confident they will be able to access affordable financing in the next 12 months if they need it.
The results also reveal that levels of trust increase with company size. Almost three in five (57%) of medium-sized businesses are confident they could get affordable finance, compared to less than a quarter (22%) of sole traders.
Chirag Shah, founder and CEO of Nucleus Commercial Finance, commented: “SMEs in the UK have been hit hard over the last two years. Covid pushed many over the edge and just as they are getting back on their feet, their costs are rising exponentially. With no cap on energy prices to to businesses and the prospect of blackouts during the winter, next year could prove to be one of the toughest.
“But companies are not alone. Having overcome the challenges of Covid, financial providers and government must work together to ensure these lessons are learned to provide the necessary support. Doing so means the UK’s battle-hardened SMEs can lead the recovery on the other side.”
