UK SMEs
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UK SMEs Forced To Borrow Or Raise Almost £50k To Survive Inflationary Crisis

New Nucleus Commercial Finance research highlights the scale of the challenge facing UK SMEs

  • 65% of SMEs are finding the current cost-of-living crisis is proving more of a burden on their business than the pandemic lockdowns
  • Just 33% believe the cost-of-living crisis is proving less of a burden than the pandemic lockdowns
  • An average of £34,433 has been borrowed or raised to support the impact the current energy/inflationary crisis has had on the finances of their business by SMEs.
  • This rises to an average of £49,613 among small/medium sized businesses (companies with 10- 249 headcount)
  • Almost two thirds (64%) of small/ medium sized business have had to borrow or raise any money as a result of the current energy/ inflationary crisis

When asked what single measure would provide the greatest boost to their business at the present time – the top 5 options among small and medium sized businesses were:

  • Re-joining the European Union (19%)
  • Having more tax incentives for innovation/ investment (18%)
  • Improving internal IT/ tech capacity and capability (11%)
  • Having more time to concentrate on innovation and growth (9%)
  • Having greater childcare support from the government (9%)

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Chirag Shah, CEO and Founder of Nucleus Commercial Finance commented: “The scale of the current economic challenge facing UK SMEs vastly exceeds that of the pandemic according to those at the coalface. This is forcing businesses across the UK to reassess their investment and growth strategies, closely examine their overheads, and, more often than not, lean on additional finance just to keep the lights on. In fact, the average amount that small and medium sized businesses have had to borrow money as a result of the current energy and inflationary crisis is now a staggering £50,000. As the crisis continues, the situation is becoming increasingly perilous and UK SMEs need help, badly.

“While some investment commitments were set out in the recent Budget in a bid to kickstart the economy – there is no silver bullet. Crucially, what cannot be allowed to happen is stagnation. Failing to properly support SMEs in the short-term will wreak havoc on the long-term prospects for the UK as a whole.”

BY CHARLOTTE WELTON

Source: Columnist 24

UK startups
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UK startups receive £941 million in government support! Three ways to stretch your business loan

The UK Government has provided startup loans to a total of 100,000 small businesses. This marks a major milestone for the scheme and means that the government has given more than £941 million in support.

Each startup that applies to the scheme is eligible to receive up to £25,000 to help their business grow. Here, we take a look at 3 ways to make the most of your small business loan and stretch £25k to much more!

Use a business credit card

Business credit cards are a godsend to any startup owner. Yet, many budding entrepreneurs fail to use them. Using a business credit card to make purchases will help you to separate your business spending from your personal spending. This is a good way to manage your loan and avoid accidentally covering personal expenses with your startup fund.

Business credit cards also come with a range of budget-stretching benefits such as: lower interest rates, higher credit limits, longer interest-free periods and discounts for early repayments. It is also possible to build company credit by using a business credit card which could help down the line.

Focus on purchases that will make money

At first, it can be tricky to dictate which purchases should be made first with your startup loan. In general, it is best to focus on items that will generate revenue for your business so that you can increase the budget that you have to spend.

It is good practice to think of every item that you buy with your loan as an investment. Will the investment generate good returns for the initial cost? If not, it is probably wise to leave this until you have more money to spend.

For example, it is better to invest the loan on creating new products to sell rather than purchasing a swanky new office. The office can wait until you’ve made some revenue! Learning how to prioritise your spending can massively help towards making your loan go further.

Contact us today to discuss Business Loans and how we can assist you..

Use what you already have

One of the best ways to stretch your startup budget is to make the most of resources and connections that you already have. This means harnessing the skills of friends, relatives, colleagues and business partners to save spending money elsewhere.

If you ask around, you will be surprised at what people around you can bring to the table. You may know people who are great at social media marketing, financial planning or even selling products. At the beginning, it’s good to make the most of anything that you can get for free! Of course, you can’t expect people to provide free service forever. However, there is never any harm in asking when you are starting out.

Conclusion

The UK government-backed startup loan is a great way to get your business off the ground! However, taking out a loan on its own may not provide all of the support that you need. To help stretch your budget try using a business credit card, prioritising your purchases and using free resources where you can.

By Alice Cumming

Source: Business Leader

SMEs
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SMEs are not confident that the Chancellor’s Spring Budget will deliver the support they need

Ahead of the Spring Budget, new data from SME funder Bibby Financial Services (BFS) reveals that small to medium-sized businesses (SMEs) have lost confidence in the Government’s commitment to support them.

In a survey of 500 SMEs from across the UK, four in five (80%) of respondents said they don’t think the government is providing enough support for SMEs.

Meanwhile, two-thirds (67%) are not confident that the Chancellor’s Spring Budget will deliver the support their business needs. This figure shows a decline in businesses’ confidence in the Government since Autumn 2022, when 62% of small to medium sized businesses reported that they were not confident that the Autumn Budget would deliver the support they needed.

Notably female business leaders feel less supported by the government than their male counterparts. 85% of female respondents don’t think the government is providing enough support for SMEs, compared to 77% male respondents, whilst 72% of female respondents are not confident that the Chancellor’s Spring Budget will deliver the support their business needs, compared to 62% of male respondents.

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Jonathan Andrew (pictured), CEO of Bibby Financial Services commented: “The UK’s small to medium-sized businesses have demonstrated incredible resilience over the past few months and years. Hit with crisis after crisis, SMEs have tenaciously adapted and evolved in any way they can to survive. But the difficult economic conditions have played havoc with their ability and desire to invest in innovation and growth.

“SMEs feel underrated, undervalued, under-supported. So, in this budget, we want to see better support and policy that matches SME’s resilience and ambition.

“First, education is key. Government should help to guide businesses to existing resources and initiatives that are currently underutilised, such as the Bank Referral Scheme. Second, the Government could take more effective steps to alleviate the burden for hardworking small businesses by pulling the levers of central and local taxation, such as business rates, and by extending the pay-back period on covid loans.”

“As the Government ‘goes for growth’, those SMEs that are sufficiently equipped to build resilience and invest in their futures will play a vital role in driving the UK’s economic recovery.”

By Lisa Laverick

Source: Asset Finance International

late payments
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Study Shows 630,000 Small Businesses At Risk Of Going Bust

630,000 small and microbusinesses could go under this year*, as the cost-of-living crisis puts unprecedented pressure on entrepreneurs trying to stay afloat.

Data analysis of 2.3 million British microbusinesses has revealed that more than one in nine (12%) fear closure before the end of 2023, which could wipe £12 billion off the UK economy**. The annual study – titled Venture Forward – is produced by website builder GoDaddy, which enables small and microbusinesses to sell online.

With the Spring Budget just 10 days away, Venture Forward shows that fewer than one in five (19%) entrepreneurs believe that Rishi Sunak is acting in the best interests of small and microbusinesses.

GoDaddy’s [Venture Forward] data showing that the microbusiness community – businesses with 10 employees or fewer – contributes £98 billion* to the national economy annually. The sector also supports more than six million jobs**, with 17% of the UK’s 5.2 million microbusinesses employing at least one other person.

Entrepreneurs call for help with soaring costs

More than three quarters (77%) of entrepreneurs say that the cost-of-living crisis is the greatest challenge they’ve faced. Rising costs are the biggest issue of concern with energy bills (80%) as the most prominent, followed by transport costs (44%) and the cost of raw materials (43%).

When asked how MPs can help microbusinesses, the most common response was to offer tax incentives (42%), followed by technical assistance for business development and help with digital strategy (both 36%). More than a third (35%) surveyed said access to capital, while three in 10 (30%) asked for subsidised/affordable rent.

Greater concern amongst Black and Asian entrepreneurs

The data also shows that the cost-of-living crisis is having a disproportionate impact on microbusinesses owned by underrepresented entrepreneurs. 85% of Black entrepreneurs say it’s the worst time they can remember, and 84% of Asian entrepreneurs: compared with 75% of white entrepreneurs, shared similar concerns.

Meanwhile, 75% of white microbusiness owners are confident they will survive until the end of 2023. This figure falls to 69% and 68% for black and Asian entrepreneurs respectively.

However, there is cause for some optimism when comparing against last year’s Venture Forward Data. Black founders accounted for 5.4% of pre-pandemic businesses, which rose to 6.6% among those started in 2021. This figure has risen to 7.3% for microbusinesses started in 2022, showing a clear upward trend for black entrepreneurs

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Chris and Sarah Fryer, from Newcastle, set up vegan pie business Magpye in 2019 :“The business has grown consistently since we started, but the past 6-12 months have been very challenging. As a bakery we use a lot of energy, so the rising cost of gas and electricity has dramatically increased our overheads. We are concerned about the energy relief scheme coming to an end in April, and would like to see the Government launch targeted help for energy-intensive businesses like ours.”

“For the majority of microbusinesses, us included, the profits are also the owners’ wages. We are facing a reality of rising costs at home while dealing with falling profits in the business, yet there seems to be little or no support for businesses like ours”

Andrew Gradon, Head of GoDaddy UK & Ireland, said: “Venture Forward demonstrates the enormous contributions made by Britain’s microbusinesses. They have the power to add billions to the economy, while providing jobs and opportunity in their local communities. When they thrive, we all do.”

“But the research also reveals the potentially disastrous consequences that the cost-of-living crisis could have on them. With more than 600,000 microbusinesses saying that they feel at risk of going under this year, it is crucial that they are given adequate support to help negate the rising cost of doing business.”

“We have very few studies that focus specifically on companies with under 10 employees. They are under-researched, misunderstood and often under-served. GoDaddy aims to change that, and we are determined to support and empower the everyday entrepreneurs that are the engine of the British economy.”

By CHARLOTTE WELTON

Source: Columnist24

UK SMEs
Marketing No Comments

UK startups receive £941 million in government support! Three ways to stretch your business loan

The UK Government has provided startup loans to a total of 100,000 small businesses. This marks a major milestone for the scheme and means that the government has given more than £941 million in support.

Each startup that applies to the scheme is eligible to receive up to £25,000 to help their business grow. Here, we take a look at 3 ways to make the most of your small business loan and stretch £25k to much more!

Use a business credit card

Business credit cards are a godsend to any startup owner. Yet, many budding entrepreneurs fail to use them. Using a business credit card to make purchases will help you to separate your business spending from your personal spending. This is a good way to manage your loan and avoid accidentally covering personal expenses with your startup fund.

Business credit cards also come with a range of budget-stretching benefits such as: lower interest rates, higher credit limits, longer interest-free periods and discounts for early repayments. It is also possible to build company credit by using a business credit card which could help down the line.

Focus on purchases that will make money

At first, it can be tricky to dictate which purchases should be made first with your startup loan. In general, it is best to focus on items that will generate revenue for your business so that you can increase the budget that you have to spend.

It is good practice to think of every item that you buy with your loan as an investment. Will the investment generate good returns for the initial cost? If not, it is probably wise to leave this until you have more money to spend.

For example, it is better to invest the loan on creating new products to sell rather than purchasing a swanky new office. The office can wait until you’ve made some revenue! Learning how to prioritise your spending can massively help towards making your loan go further.

Contact us today to discuss Business Loans and how we can assist you..

Use what you already have

One of the best ways to stretch your startup budget is to make the most of resources and connections that you already have. This means harnessing the skills of friends, relatives, colleagues and business partners to save spending money elsewhere.

If you ask around, you will be surprised at what people around you can bring to the table. You may know people who are great at social media marketing, financial planning or even selling products. At the beginning, it’s good to make the most of anything that you can get for free! Of course, you can’t expect people to provide free service forever. However, there is never any harm in asking when you are starting out.

Conclusion

The UK government-backed startup loan is a great way to get your business off the ground! However, taking out a loan on its own may not provide all of the support that you need. To help stretch your budget try using a business credit card, prioritising your purchases and using free resources where you can.

By Alice Cumming

Source: Business Leader