Funding Circle: 77pc of SMEs expect to need additional funding
More than three quarters (77 per cent) of small- and medium-sized enterprises (SMEs) expect to need additional financing in the future, according to new research from Funding Circle.
The SME lender found that UK-based business owners are showing increased resilience and optimism despite ongoing economic headwinds.
78 per cent of SMEs told Funding Circle that they felt the economic challenges that they faced during 2023 have increased the resilience of their business, while a growing number of business owners reported “no concerns” for their business.
Read more: British Business Investments: Addressing the SME funding gap
88 per cent said that they felt equally or more optimistic when looking at the next 12 months.
However, despite these green shoots, many business owners are still struggling with the economic instability which has prevailed for the past few years.
45 per cent of SMEs told Funding Circle that they had paused, cancelled or delayed an investment in 2023.
In order to unlock their growth potential, 77 per cent expect to need to access additional finance in the future, with more than half of all firms (52 per cent) expecting to do so in the coming 12 months – a three percentage point increase from a year ago. Of those, 73 per cent expect to use this additional funding for investment and growth.
“Day in, day out we see remarkable innovation and adaptation from SMEs dealing with a multitude of challenges and economic uncertainty,” said Lisa Jacobs, Funding Circle’s chief executive.
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“It is encouraging to see some green shoots as increasing numbers of small businesses are reporting plans to expand over the coming year, which will be beneficial for our communities, jobs and the whole UK economy.
“Funding Circle looks forward to backing these businesses and supporting their growth with much needed finance.”
The research paper, which was published in partnership with Oxford Economics, also showed that Funding Circle’s financing solutions have reached businesses in each of the UK’s 650 parliamentary constituencies last year, with an average of £1.5m per constituency.
In 2023, Funding Circle’s loans under management supported a £6.9bn total contribution to UK GDP, and was associated with activity stimulating £1.6bn in tax revenues.
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