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Brexit worries give way to COVID-19 gloom

14 July 2020
Submitted by Anonymous (not verified) on Tue, 07/14/2020 - 16:27

Growth prospects for small firms in the UK are looking bleak as business owners say cash flow problems, red tape and lack of funding are holding them back.

A new poll has found that the proportion of UK small business leaders that say they are facing significant barriers to growth has jumped from 75% to 91% in the past six months.

Hitachi Capital Business Finance has been tracking small business opinion on growth for five years. During 2019, with concerns over Brexit, the net percentage of small businesses that worried about barriers holding them back was regarded to be high. Six months on, the advent of COVID-19 has taken fears to a new level.

The latest YouGov survey of 1,268 small business leaders has found that the percentage of small businesses that predict growth has fallen from 39% to just 14% in the past three months. Across all key industry sectors, there has been a rise in the number of businesses that are now more concerned about the future of their business (up from 27% to 32%).

However, since the outbreak of COVID-19, there has been a fall in the percentage of small firms worrying about economic uncertainty specifically linked to Brexit (down from 53% to 49%).

As some business sectors prepare to come out of lockdown, around half of those polled cited specific challenges that they regard as barriers to getting their business back on track in the post-lockdown era. The biggest barriers are:

  • Volatile cash flow (cited by 24%);
  • Red tape (11%);
  • Banks being restrictive on lending money (10%);
  • Lack of understanding from lenders (7%);
  • High bank fees and charges (6%);
  • The cost of skilled labour (5%);
  • The value of sterling/exchange rates (5%).

The sectors most worried about barriers to growth in 2020 are: hospitality and leisure (96%), medical and health (95%), manufacturing (94%), legal (94%), construction (93%), media and marketing (93%), transport and distribution (92%), retail (91%), education (91%) and finance and accounting (90%).

Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance, said: "Our latest findings make clear the scale of the challenge with nine in ten business owners feeling there are things holding them back. Market-related factors from Brexit and COVID-19 are hard to deal with, but there are also specific issues relating to red tape, cashflow and finance that can be tackled."

Written by Rachel Miller.

News type: 
Small business news