Amid the UK’s continuing economic downturn, small to medium enterprises are facing immense pressure.
Many SME owners believe the UK economy can support businesses looking to scale up – but shocking statistics show that 49% of enterprise bosses are unaware of financing opportunities that could support them.
The news arises from the Federation of Small Businesses’ report, ‘Credit Where Credit’s Due’, quoted in PRISM’s new white paper, ‘Out of the Frying Pan… A Detailed Look at 2023 Challenges for UK SMEs’.
This stark statistic arrives alongside the news that at least 66% of small firms surveyed by the FSB are keen to invest in themselves by 2024.
Worryingly, this indicates 34% of small firms don’t intend to invest in their own brands within the next 12 months. It is, as PRISM explains in their white paper, just one indication that SMEs are left paddling for their lives in an ever-rising tide of downturn.
Furthermore, PRISM explains that there is ‘fragile confidence’ amongst SMEs with regard to growth and prosperity. Their white paper explores data that shows the vast majority of small business owners find it difficult to apply for funding, and that less than half of those who do apply are unsuccessful.
Could it be that SME owners are simply tired of believing in themselves – as a result of rising inflation, lack of apparent support, and ongoing negative press surrounding the government’s crisis handling?
PRISM’s white paper explores multiple statistics and surveys to explore quite how pressured SMEs feel. It is not unreasonable to suggest that a sheer lack of outward support in an increasingly tense climate may deter business owners from seeking out financial injections.
It’s clear that, as a result of the ongoing crisis, investors themselves have needed to scale back their financial projections for the year ahead. It’s a further knock-on effect of what’s referred to as a ‘perfect storm’ for the British economy, heading out of the pandemic.
What’s more, the short yet chaotic period during which Kwasi Kwarteng was Chancellor of The Exchequer in 2022 did little to endear governmental finance to the masses.
Many SME owners feel that they are unfairly marginalised when asking for financial support. It’s clear to see why there is so much of a gulf between those who want to invest in themselves, and those who don’t.
However, good news appears to be emerging on the horizon. Not only are there multiple funding avenues still open for SMEs to take advantage of, the British economy doesn’t seem to be sliding back into recession, despite mass media panic over the cost of living crisis.
Statistics from the National Institute of Economic and Social Research, quoted in PRISM’s white paper, suggest that GDP growth and unemployment rates performed better than experts had anticipated in 2022. This data suggests that the UK’s financial woes are only temporary.
That, however, is small comfort. It doesn’t dilute the fact that SME owners are still amongst the least confident about their future in the current climate. 2023’s spring budget, for example, hasn’t completely reassured those currently in a state of flux, according to PRISM.
PRISM further states that a staggering 92% of surveyed SMEs hold economic climate stability as their number one concern for 2023. Brexit and Ukraine conflict supply chain curtailments, for example, are only adding to the pressure they’re currently feeling.
A lack of awareness surrounding funding options is likely growing as a result of ongoing disenchantment with the government’s handling of the economy. An awareness campaign to help promote such schemes may not only help those SMEs in need, but also help boost the government’s negative economic persona.
The phrase used by David Cameron years ago – ‘We’re all in this together’ – hits particularly sour for SMEs in the here and now.
While there are opportunities for SMEs to claim funding and invest in themselves, finding the confidence and willingness to apply is, according to PRISM, an increasingly difficult first step.