A survey by alternative lender Capify has highlighted a demand for more financial support with cashflow, expansion and funding for new equipment among the reasons
Confidence for the future is mixed with 38% expecting the economy to improve while 36% expect a decline in 2021
43 per cent of SMEs say the support offered by the government to businesses has not been good enough
Eighty-three per cent of UK SMEs are still actively looking for finance according to a new study, despite the government’s Bounce Back Loan Scheme (BBLS) having lent almost £45bn to more than 1.4m businesses.
The findings of a survey by alternative lender Capify revealed that boosting cashflow was the top priority for 57% of businesses, followed by expansion (29%) and funding for new equipment (14%).
More than 100 SMEs were involved in the pulse survey, which also found that 43 per cent of businesses believe the support offered by the government throughout the pandemic has not been good enough.
When asked about their confidence for growth in 2021, 38% expected the economy to improve while 36% expected a decline. Twenty-five per cent expected things to stay the same.
The findings come as the government announced a new ‘Pay as You Grow’ scheme to offer businesses with a Bounce Back Loan more time to repay their loans if they need it. It also follows new figures that show how another government-backed scheme – the Coronavirus Business Interruption Loan Scheme (CBILS) – has lent almost £20bn to more than 80,000 businesses.
“It’s clear that UK SMEs are still in desperate need of finance this year despite the huge amounts of money that have been lent through the BBLS and CBILS,” said John Rozenbroek, CFO/CCO at Capify.
“The businesses we speak to have either accessed the schemes already and now need a second injection of capital, or they were not able to access the scheme in the first place. The new Pay as You Grow scheme will provide some welcome relief for many businesses, but it does not address the fundamental issue, which is that SMEs still need finance.
“We’re seeing increasing demand from SMEs across all sectors and the findings from our study suggest that there is still plenty of optimism in the business community, with ambitions to expand or invest in new equipment, facilities or technology.”
The Capify pulse survey also found that almost 30% of business say their turnover had decreased by more than 75% in 2020.
Half of all businesses (50 per cent) say they have made changes to their business model in order to respond to the challenges of the pandemic, with producing or selling a different product range the most popular answer (29%).
“We know that there’s a huge amount of resilience and determination amongst the UK’s small businesses, which really are the backbone of the UK economy,” added John.
“2020 will go down as one of the most challenging years in history, but with the nation-wide vaccine rollout continuing at pace and consumer confidence beginning to return, there are positive signs that recovery is on the horizon.
“Traditional banks continue to make it difficult for SMEs to get the finance they so desperately need to get back on their feet properly, which means that alternative lenders like ourselves will have a crucial role to play in the months that lie ahead.”
Capify is an online lender that provides flexible financing solutions to SMEs seeking working capital to sustain or grow their business. The fintech company has been operating in the UK market for over 13 years and also has a sister company, Capify Australia, which provides similar services to Australian SMEs for over 13 years.
For more details about Capify, visit: http://www.capify.co.uk