Higher business running costs biggest concern for SMES in 2023
As Chancellor Jeremy Hunt announced measures intended to lift the UK economy in the Spring Budget, data from iwoca highlights what small businesses were most worried about as they entered 2023.
Small business lender iwoca’s latest SME Expert Index data – based on UK finance brokers who submit over 2,000 SME finance applications a month – reveals a third of experts (32%) report increased business running costs as small businesses’ top concern. The Budget statement contained a number of measures that touched on these worries.
Also featured in the top concerns list were higher interest rates, and having to close the business (according to over one in 10 brokers respectively).
Top SME concerns
1. Increased business running costs, 32%
2. Recession, 12%
(=)3. Having to close their business, 11%
(=)3. Higher interest rates, 11%
4. Access to finance, 9%
5. Ability to hire or retain staff, 7%
Whilst inflation is set to fall over the course of the year, SME owners may see other costs rise as Corporation Tax increases to 25%.
Fifth on the list of concerns was the ability to hire and retain staff (according to 7% of brokers). The Chancellor introduced a raft of measures encouraging workforce participation in the Budget, through expanded access to childcare and skills training for over-50s. Although this could be a concern for some SME owners (and is a priority for the Government), it doesn’t seem to be as much of a priority for the segment of business owners when surveyed for iwoca’s Q4 SME Expert Index.
Colin Goldstein, Commercial Growth Director at iwoca, said: “Small and medium-sized businesses across the country are searching for financial support as they endure uncertainty. Whilst forecasts tell a more positive than expected story for the UK economy this year, the reality on the ground for many SMEs will still be difficult, characterised by high costs and reduced consumer spending. Access to finance during this period becomes even more vital to keep them on track.”