The majority of small and medium-sized enterprises (SMEs) are looking for a cash injection and more than a tenth said crowdfunding was their preferred funding option, according to a report.
Bibby Financial Services’ annual SME Confidence Tracker survey of 500 UK SME owners and decision-makers found that 81% would consider some kind of cash injection from external sources to support their business.
12% said they plan to choose crowdfunding as their main way to fundraise this year.
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The top three options were: business loans (34%); credit cards (30%); and overdrafts (29 percent). This is followed by government loans (21%), invoice financing (19%), private equity (14%) and asset financing (13%).
Nearly two-fifths (15%) of companies rely on external financing to support their operations and 17% have a frequent need for external financing due to significant cash flow problems.
More than a quarter (28%) of SMEs said external financing is not essential, but they use it to enable business growth and ensure steady cash flow. In manufacturing, more than a third (34%) of companies said this was the case.
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The report also found that the majority of SMEs (82%) now feel confident about their prospects this year, with 38% – or 2.1 million – describing themselves as “roughly in balance”.
SMEs are most concerned about inflation (42%), conflict in Europe (37%), supply chain disruptions (33%), ongoing pandemic challenges (33%) and flows cash (26%).
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“British businesses face a heady cocktail of issues that threaten to impact growth forecasts for 2022 and beyond, including soaring inflation, skills shortages and a crisis in the cost of labor. life never seen on such a scale in the 21st century,” said Derek Ryan. , UK managing director of Bibby Financial Services.
“While our report highlights stoic resilience within the UK SME community, many are still struggling to keep their heads above water and operate day-to-day, rather than looking to growth .
“SMEs have faced the pandemic with courage and now they must continue to adapt and change to carefully manage the rising costs of doing business.
“It’s clear that cash flow issues and payment issues continue to plague businesses, and it’s now more important than ever that they have access to working capital to support day-to-day operations and to pay down debt incurred. at the height of the pandemic.
“But they cannot succeed alone; it is essential that they receive the support of the private and public sectors, and we urge policymakers to look closely at tax cuts and broader energy subsidies to help SMEs and ensure that they continue to play a central role in the UK’s economic recovery.