UK small businesses are increasingly confident in their ability to grow and power the economic recovery, although many still have fears about the ongoing impact of Covid restrictions. This comes according to new data published by the British Chambers of Commerce in partnership with Funding Circle, the UK’s largest small business loan platform.
The survey of more than 1,000 firms, almost all SMEs, reveals the majority (63%) are emerging from lockdown with either concrete plans or intentions to grow their business over the next 12 months. The manufacturing sector (68%) is particularly optimistic, while nearly six-in-ten (58%) of the hardest hit business-to-consumer (B2C) firms such as hospitality, catering and retail still anticipate growth.
Although the UK economy is yet to fully reopen, many businesses have demonstrated their resilience and are already carrying out their vital role as engines of economic growth. More than half (53%) said they had already restarted or returned to pre-pandemic levels in April, with a further 27% expecting to reach this milestone by October. By the end of the year, 91% of businesses expect to have fully restarted, with only 1% not expecting to restart for the foreseeable future.
For many, the biggest barriers to reopening are Covid-related, such as the risk of further lockdowns (cited by 38% of respondents) or social distancing requirements (cited by 37%). Concerns around reduced customer demand (33%), inflation pressure (18%) and recruitment difficulties (14%) are also weighing on UK businesses.
Access to finance will be key in helping SMEs to unlock their full growth potential, with nearly half (44%) believing it will help overcome the remaining barriers they face.
Commenting on the findings, Claire Walker, Co-executive Director of the BCC, said: “The ability of businesses to bounce back from the devastation caused by Covid is a huge testament to their resilience. Although, the financial support put in place by the government to help many through the last 12 months will have played a crucial role.
“The government must now clarify the future of safety measures, such as social distancing, and set out a clear package of support that would be available should further restrictions be imposed on businesses this year, or in the years to come.
“Firms will feel more confident and will be more willing to invest in jobs and in developing their business, if government can give assurances that a safety net of financial support will be provided should there be a need for restrictions which reduce or stop commercial activity in order to protect public health.
“There is cautious optimism growing among firms that as the economy now gradually unlocks, they will be able to push on and return to growth. But the shadow of Covid is very long; many firms still feel uncertain about what the future holds. Having access to finance to help them weather this continuing uncertainty may well prove vital.”
Lisa Jacobs, Europe Managing Director at Funding Circle, added: “While the road to recovery won’t be straightforward, it is great to see SMEs are looking towards the future with such optimism. From our conversations with customers, it’s clear their appetite to invest in their businesses is as high as ever. We’re ready to continue helping them access the finance they need to overcome the remaining hurdles they face, and achieve their growth ambitions.”
A summary of the survey can be found HERE.