Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

SME confidence makes a cautious comeback

by May 11, 2023
May 11, 2023
SME confidence makes a cautious comeback

There are signs of confidence returning to the UK’s 5.5m small and medium-sized businesses and the lending market they rely on.

New research by small business lender iwoca, carried out with over one hundred SME finance brokers reveals that worries about a recession are at their lowest level in a year. While three in five brokers reported concerns from SMEs about a future recession, this is down from a high point of nearly four in five in Q2 2022.

Worries about recession have also dropped from being SMEs’ second biggest overall concern, to their fourth, since Q4 2022, with half the amount of brokers selecting it as the top concern compared to last quarter. Mirroring this cautious optimism, the data finds that the most common reason for SME loan applications according to over half of brokers was growth.

This comes as the data shows that nearly half of brokers have seen increases in the number of loans they are applying for on behalf of SME clients. By contrast, just over one in ten brokers reported a reduction in loan applications.

Significant headwinds remain for UK SMEs

While the first dataset from brokers in 2023 shows signs of confidence, challenges remain for small and medium-sized businesses operating across the UK.

Three quarters of brokers said that the SMEs they work with are concerned about their business surviving the increasing costs of energy prices.

More than half of the brokers iwoca surveyed reported either increased business running costs or inflation as the top current concern for SMEs, up significantly from just a third reporting the same in Q4 22. By comparison, inflation did not feature in the top five concerns in Q4 22, with only 2% of brokers citing it.

Increasing costs were the most selected concerns by a long way, with far fewer brokers selecting other options such as access to finance, higher interest rates, recession, ability to hire or retain staff or something else.

These fears coincide with the latest inflation figures from the Bank of England – the UK is experiencing a 10.1% inflation rate, five times the official 2% target.

Small businesses are also worried about the support available to them. Just two in ten brokers think the fiscal measures announced by the Chancellor in the Spring Budget will have a positive impact on SMEs.

Tough lending environment set to continue

Despite more SMEs applying for loans to grow their businesses, and concerns about a recession receding, data from brokers shows a tough lending environment remains.

More than three in four report that high street banks are reducing their appetite to fund SMEs. Similarly, four in ten brokers have seen an increase in rejections of their clients’ applications for finance over the last quarter.

Sam Jones from broker NGI Finance said: “I’m seeing an increase in applications from SME owners who are looking for finance for growth; there’s a big appetite for acquisitions, as well as support for stock purchases and recruitment costs. This indicates that many business owners are more confident they can ride out recession worries.

“I don’t think the most recent budget was particularly aimed at helping SMEs gather momentum after some tricky years; the increase in Corporation Tax, reduction in tax-free allowance for dividend income and the end of support for energy prices will cause concern for businesses who will be hit with higher bills when growth is not guaranteed.

“As businesses are slowly getting used to the increased cost of money, they’re open to a variety of more flexible facilities, to make sure the funding is going to work for them.”

Willem van Lynden, Managing Director of broker Rise Funding said: “We’ve noticed an increase in demand for finance from our small business clients, as well as an increased take up of the offers we’re presenting them with.

“Whilst the fear of recession does seem to be slightly receding, there are also signs that business owners are looking to improve their cash flow and reduce monthly outgoings; they’re asking for longer term loans and even considering secured loans, when previously this was not an option for them.

“I think business owners can no longer afford to hold off on making finance decisions, which they may have been doing during recent uncertain times.”

Colin Goldstein, Commercial Growth Director of iwoca, said: “The lending market for the UK’s 5.5 million small and medium-sized businesses is gradually gaining momentum. With more applications for loans, more businesses requesting finance to grow their business, and recession fears continuing to recede, there are positive signs that the market and health of our economy will improve.

“But while I’m cautiously optimistic, I know the very real challenges SMEs face. I speak to brokers day in, day out; they’re seeing high street banks retrenching, huge pressures coming from the energy market, and concerns about the lack of support from central government.”

Read more:
SME confidence makes a cautious comeback

0
FacebookTwitterGoogle +Pinterest
previous post
Government gives 14 SMEs £2.5M to accelerate their small automotive businesses  
next post
Bank of England raises UK interest rates to 4.5%

You may also like

Apple Faces Lawsuit by US Over Smartphone Market...

March 22, 2024

New sweepstake casinos for 2023

February 16, 2023

IR35 reforms to be scrapped in April 2023

September 23, 2022

Retail, hospitality and leisure sectors face fresh uncertainty...

April 14, 2025

UK SMEs eye £4bn NI savings despite looming...

March 13, 2025

British Steel’s Chinese owner seeks huge government aid...

October 3, 2022

Small businesses responsible for 80% of tax evasion,...

September 9, 2024

Hunt hints further tax cuts could be announced...

January 21, 2024

Ex-F1 boss Bernie Ecclestone pleads not guilty to...

August 22, 2022

Jamie Klingler, Co-founder of campaign for women’s safety...

November 2, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump ally stands firm against ‘big, beautiful bill’ despite pressure: ‘It’ll completely backfire’

      June 8, 2025
    • Rubio condemns assassination attempt on Colombian presidential candidate Miguel Uribe

      June 8, 2025
    • Obama WH physician says Biden doc should have performed cognitive test

      June 8, 2025
    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,571)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved