Novuna Business Finance: Small Business Reliance On Securing Finance To Power Growth Hits Six-Year High
LONDON, Dec. 14, 2023 /PRNewswire/ -- Bah humbug! Christmas is not the season for lenders to be restrictive on lending, according to new research. As we count down to a peak trading period, the percentage of small business owners that say they would have to abandon growth plans if they were unable to secure funding has reached a six-year high (57%). The research from Novuna Business Finance reveals this has risen from 53% last quarter and 51% this time last year.
As 2023 ends, with small businesses facing challenges like high fuel prices and supply chain costs, the survey of 1,107 business owners shows an increasing reliance on finance for initiatives to drive growth.
Across five industry sectors – manufacturing, leisure, IT, medical services and media - the percentage of small businesses saying their growth planning would be curtailed if they were unable to get funding stood at a six-year high. Significantly, across all these sectors, reliance on funding to power growth initiatives was significantly higher than was the case during the first year of the pandemic.
The growth initiatives most likely to be put on hold if they were unable to secure finance included:
- Job creation and hiring - 29%, hitting a two-year peak.
- Launching new products and services - 29%, hitting an 18-month high and a rise from 25% six-months ago.
- Running a marketing or advertising campaign - 25%, a 12-month peak (up from 21%).
- Moving to a bigger premises - 22%, hitting an 18-month high.
- Modernising IT capabilities / buying new equipment - 21%, up from 18% six-months ago.
Jo Morris, Head of Insight at Novuna Business Finance comments: "At this time of year, a lot of focus is placed on the importance of Christmas trading to small businesses and their growth prospects. In truth, access to funding is becoming the key determinant for growth. For much of 2023, our research has shown that small business growth forecasts have remained flat, as many enterprises anticipate and react to a period of prolonged economic uncertainty.
"Despite this context, small business owners have worked hard to adapt and look for new ways to secure growth. For a record number, access to finance and funding is essential to help these enterprises to fulfil their true potential."
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