Research from Liberis, a leading small business finance provider, has revealed that 55% of UK businesses are unable to access the funding needed to grow.
The main hindering factor has been revealed as a lack of education or understanding of their funding options.
With falling SME confidence in the economy and mounting concerns over costs given the relative weakness of the sterling, Liberis strongly urges the UK to better support its small business community.
SMEs contribute more than £200 billion a year to the UK economy, with this number expected to grow by almost 20% by 2025. Yet, without a vital cash injection, this 2025 vision will be severely stinted.
Hindering growth opportunities, this lag in SME development may in turn negatively impact the economy.
Liberis believes it is crucial to ensure better understanding on how to navigate the perceived minefield of funding options. Small business education is desperately required to increase awareness levels of the process; greatly benefiting both businesses and economy alike.
Such movement has been reinforced in a recent report from the British Business Bank, in which the UK Government backed organisation pledges its dedication to a more targeted educational campaign on the topic of SME finance.
While 62% of UK SMEs said they need funding to grow and expand, but 57% of SMEs were unsure which provider to obtain funding from and 53% did not have a set amount in mind when looking to access finance.
Liberis found 22% of businesses require funding to maintain business as usual, while 5% need funding to survive past the first year of business.
Speed of funding has been identified as integral to achieving this growth.
Other findings of the report showed an increase in the popularity of crowdfunding as a source, with 10% of UK SMEs looking to use this as a means for funding in the next two years.
Commenting on the report, Rob Straathof, CEO at Liberis, said: “These findings have opened our eyes to a lack of confidence and awareness among SMEs in how to correctly secure the funding they so desperately need. Funding will continue to be a hot topic for the small business community, but urgent action and collaboration is crucial to prevent resulting damage to the UK economy.
“Without sufficient financial education and support, the UK’s business ambitions will be severely affected but by ensuring they have the correct financial understanding, we can help secure and strengthen their livelihood; fast-tracking their ambitions.”