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The UK’s SMEs predict significant implications from the upcoming Budget on their growth strategies, according to Simply Asset Finance.
- 74% of SMEs expect the upcoming Budget to affect their growth plans, with nearly a third anticipating a significant impact.
- 30% of SMEs have already adjusted operations due to economic conditions, including price increases and shifts to remote work.
- Energy costs, inflation, and interest rates are among the primary concerns for SMEs as they navigate the current economic climate.
- The Government faces mixed reviews from SMEs on its support, with calls for more action in the Budget to aid business growth.
A recent survey by Simply Asset Finance highlights that an overwhelming 74% of small to medium-sized enterprises (SMEs) in the UK believe the forthcoming Budget will influence their future growth trajectories. Of these, nearly a third of businesses anticipate a substantial impact, while 13% regard it as a fundamental influence. Conversely, a mere 15% foresee no impact from the Budget on their growth aspirations.
The current economic landscape has already prompted 30% of SMEs to adjust their strategies. This includes measures such as raising prices, transitioning to fully remote work environments, and increasing the outsourcing of business services. Simultaneously, investment in innovation and growth has been paused or scaled back by 16% of the SMEs surveyed.
Energy costs remain a pressing concern, with 49% of businesses citing an unresponsive economy, 37% worrying about high inflation, and 35% expressing anxiety over high interest rates impacting credit availability and cost management.
Despite these challenges, there is a glimmer of optimism among some SMEs. 42% of respondents are positive about the year ahead, with 30% foreseeing it as ‘pretty good’ and 12% expressing excitement about growth prospects. Nevertheless, 18% concede that their growth may be limited.
Only a quarter of SMEs plan to seek external financing to invest in technology, with around 19% intending to borrow for market expansion. Additionally, while 17% aim to enlarge their workforce and improve infrastructure, a scant 11% are looking to use external finance specifically for research and development innovation.
When reviewing governmental support, SMEs hold varied opinions; 40% feel disappointed by current measures, whereas 31% are satisfied. Key areas SMEs want addressed in the Budget include support for soaring energy costs (33%), reduction in red tape (28%), and increased tax incentives for innovation (27%). Further priorities include fostering closer EU ties and establishing government-backed loans for small enterprises, each highlighted by 24% of respondents.
Mike Randall, CEO of Simply Asset Finance, underscores the urgency for the government to gain the confidence of UK businesses. He emphasises the need for targeted measures to help SMEs seize growth opportunities amid a promising economic forecast by the OECD, predicting an increase in growth projections from 0.4% to 1.1% in 2024. Randall advocates for the government to prioritise SMEs in the Budget by addressing energy costs, streamlining regulations, and enhancing tax incentives, thereby empowering these enterprises to innovate and compete across various markets.
The upcoming Budget presents a crucial opportunity for the Government to support SME growth amidst economic challenges.