A recent survey conducted by invoice finance company Novuna Business Cash Flow has shed light on the pressing need for more accessible and flexible financing options for small and medium-sized enterprises (SMEs) in the UK.
The survey, which polled 500 SMEs, underscores the critical role of financing in ensuring the survival of these businesses, with alarming statistics revealing the precarious position many SMEs find themselves in.
The survey revealed a concerning statistic: 34% of SMEs are at risk of permanent closure if they fail to secure necessary funding. This worrying figure underscores the urgent need for accessible financial support to prevent the demise of a significant portion of the SME sector.
Challenges in Accessing Funding
Despite the urgent need for financial assistance, the survey found that 50% of SMEs have not sought any form of financial support since November 2023. This reluctance can be attributed to various factors, including the challenging economic conditions exacerbated by the COVID-19 pandemic. Additionally, 28% of SMEs reported being rejected for essential funding, further hindering their ability to secure financial assistance.
The survey also revealed a shift in the SME financing landscape, with 29% of businesses applying for funding for the first time ever since November 2023. This increase in demand highlights the growing financial strain faced by SMEs and underscores the need for adaptive financing solutions to meet evolving needs.
Call for Enhanced Financial Support
John Atkinson, Head of Commercial and Strategy at Novuna Business Cash Flow, emphasised the need for a more supportive financial environment to address the challenges faced by SMEs. He also stressed the importance of creating adaptable financing solutions that acknowledge the evolving needs of SMEs and provide broader access to financial assistance and support.
As SMEs continue to navigate through uncertain economic times, the call for enhanced and flexible financing options becomes increasingly urgent. By addressing the funding challenges faced by SMEs, we can also safeguard the future of these vital contributors to the economy and ensure their continued growth and resilience.
