Last updated: 12 Nov 2024 10:00 Posted in:
Almost a quarter (24%) of UK SMEs cite cash flow challenges and lack of working capital as a barrier to growth, according to a new survey.
Capify’s latest Business Confidence Survey also found that 71% of firms are not confident of being able to secure external finance from their existing banking partners. And almost three-quarters of business owners (73%) report having previously required external funding to help cash flow issues.
Capify asked more than 250 SME business owners to reflect on their business performance across the first quarter of 2024 and to look toward their prospects for the year ahead. Those surveyed came from every sector, industry and region in the UK.
Capify COO/CFO John Rozenbroek said the quarterly survey “gives us an invaluable opportunity to better understand the challenges facing SME owners today and gauge their hopes and fears for the future”, saying the latest analysis shows that UK SME confidence improved in the first quarter of 2024.
Nearly half of surveyed businesses predict revenues to increase in the year ahead, while two in three SMEs are expecting to add headcount in 2024. Overall, the number of areas in which respondents are looking to invest has increased quarter-on-quarter.
Rozenbroek commented: “Despite this renewed confidence, the survey also reveals a picture of continuing operating challenges, with increased supply chain costs and ongoing market volatility still lingering on Q1 trading performance. Nearly half of respondents recorded a reduction in profitability in the first quarter of the year, while a similar number confirm they were trading below forecast.
“While it’s too early to know whether the survey’s positive indicators are a sign that the economy has turned a corner, there is certainly cause for cautious optimism.”
Employing nearly 17m people and generating £2.4trn annually, SMEs play an absolutely integral role in the UK economy, the report said. Rozenbroek said: “The link between access to capital and the ability for SMEs to survive and thrive is evident. So it’s disheartening to see how many don’t feel confident in their ability to secure much-needed funding from their banking providers. Ensuring these businesses have adequate access to fast, simple and responsible lending can be a real catalyst to their potential.”
“The link between access to capital and the ability for SMEs to survive and thrive is evident. So it’s disheartening to see how many don’t feel confident in their ability to secure much-needed funding from their banking providers."
John Rozenbroek, COO/CFO, Capify