UK SME’s are grappling with rising costs and a perceived lack of support during the current financial crisis, according to a survey by Censuswide.
While SME survival rates have been declining, interest rates and trading costs have been rising quickly. However, independent polling firm Censuswide finds that many SMEs in the UK feel undersupported at a time when business owners most need it.
In the UK, 72% of SMEs believe their banking partners are only partially supporting them amid the present financial crisis. About 73% of respondents admitted that they frequently have trouble even getting a meeting with their bank or financial manager.
As the backbone of our economy, SMEs need all the help they can get to prevent collapse, according to Lynne Darcey Quigley, CEO and founder of Know-it, a cloud-based credit management tool.
According to the Federation of Small Businesses, SMEs make up around three-fifths of the workforce and about half of the total UK private sector’s revenue. SMEs employ about 16.4 million people, or 61% of all employees, and generate about £2.1 trillion in revenue, or 51% of all revenue.
Small enterprises (those with fewer than 50 employees) employed 12.9 million people, or 48% of all workers, and generated £1.6 trillion in revenue, or 36% of all revenue.
According to Lynne Darcey Quigley, “SMEs jumped out of the metaphorical frying pan and right into the fire of the current economic difficulties following the opening up of the country following the pandemic. It should never happen, but it should be especially rare in times of economic crisis, when SME owners have such an overwhelmingly negative view of their banking partners. Long-term harm will result from the banking industry’s short-sighted decision to put the demands of larger clients first.
Assisting SMEs at a “difficult period”
SME executives also said that high trading costs have thwarted efforts for foreign and overseas trade. According to 72% of respondents, bank transfer costs abroad should be lowered for smaller businesses.
The research’s sponsor, HedgeFlows, whose co-founder Neh Thaker stated: “The time has come to equip SMEs with a level playing field to expand internationally, giving them access to a suite of services required to manage overseas transactions, currency conversions, and cashflows.”
Despite the fact that 69% of respondents stated their business would benefit from going global, 65% believe they currently lack the financial know-how to set up shop abroad. A further 78% acknowledged that their business’s cash reserves are constrained due to rising inflation and the unpredictability of the economy.
In her article, Darcey Quigley explained how SMEs have additional support alternatives besides banking partners: “Thank goodness, SMEs may now rely on other support foundations besides banking partners. The most recent technology can offer SMEs automated and fully integrated services to aid them in getting through this challenging time. A few of the instruments now available to help SME survival include computerized payroll, invoice finance, and end-to-end credit management.