Access to funding ‘make or break’ to small business success in 2018

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More than two in five small business owners say that specific expansion plans for 2018 would have to be put on hold if they were unable to secure funding.

At a time when UK SMEs are defying Brexit uncertainty with a bullish outlook for the three months to January 2018 – 38 per cent predicting significant expansion or strong organic growth – the issue of access to finance to many has now become critical.

This was most acutely felt by those SMEs that were most likely to predict significant growth for the next three months – 65 per cent of these said they would have to put various growth plans on hold if they were unable to secure appropriate funding. The same was true of younger enterprises that had been trading for less than five years.

Taking on the big boys

During the summer months, nearly half of small businesses saw clear opportunities for their business as a result of Brexit. Stealing market share from larger competitors that were more distracted by Brexit-related issues was seen as a key opportunity, as was attracting top talent from people leaving larger firms. However, from the new Hitachi data, small business owners say that an inability to secure funding for 2018 would halt their plans to compete with larger brands.

Reaching new markets with new services

With the summer research from Hitachi Capital Business Finance revealing that SME’s were nimble in adjusting to Brexit by looking to open up markets outside the EU, the new data also suggests the lack of access to funding will also directly hold back any plans to open up new markets and diversify product offers.

IT and training

One in five business owners said a failure to secure funding would hinder their plans for IT upgrades and investment in improved systems. This comes at a time when many smaller ventures are grappling with cyber crime, a digitised marketplace, the fast evolution of cashless payments and also gearing up for the changes to data protection in 2018.

Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance commented: “The principle of high street lenders doing more to support the small business sector has been widely debated but we are now at a critical moment. For the last year, our data has shown the SME sector to be far more likely to see growth opportunities from the uncertainty of Brexit and to have crafted plans for 2018.

For many, these plans will only come to fruition if small businesses secure funding, something most strongly voiced by those ventures that foresee significant business expansion in the months ahead. At a critical time, the economic impact of small businesses being starved of business finance has never been clearer or more tangible.