Access to finance jeopardizes the job creation supply of UK small businesses

Almost half of UK small businesses (49%) rely on securing finance to help them achieve their growth plans for the coming year.

After three consecutive quarters in which the outlook for small businesses has remained unchanged (34% of business owners predicting growth), the new Business Barometer study from Hitachi Capital Business Finance suggests that access to finance will be key to helping the small business sector to rebuild itself and support the economy. growth in the new year.

Job creation emerged as the most urgent problem for which funding was needed. Significantly, at a time when some sectors face labor shortages, the new study finds that for 30% of small businesses, plans to invest in creating jobs for the workforce Qualified work depends on obtaining financing by the company first. This pressure was most pronounced in the manufacturing (51%) and IT / telecoms (34%) sectors. Regionally, small businesses in London were the most likely to say they would need financing before they could move forward with their hiring plans (41%).

With three-fifths of UK employment dependent on the small business sector, a hiring freeze over access to finance issues could have a profound impact on the UK’s economic recovery after Covid.

Hitachi Capital’s quarterly survey of 1,211 small business owners also found that 25% of businesses would struggle to launch new products and services without first securing financing. This comes at a time when many businesses large and small have had to look for new ways to rebuild and recover and for many it has involved a diversification of services and product lines. Small businesses in retail (46%), manufacturing (29%), and IT and telecommunications (29%) were the most likely to see their innovation and diversification projects slowed down if they didn’t were unable to secure funding.

The Barometer results also highlight the important role finance plays in helping small businesses reach new customers. More than one in five small businesses (24%) said that without access to financing they would not be able to move forward with new marketing and advertising campaigns. In addition, almost a third of small businesses (31%) who said they already have an extensive international offering in many countries (including and beyond the EU) said advertising and marketing would be impossible. without obtaining financing (vs. 22% of business with only UK based clients).

While many companies are considering returning to the workplace, new Hitachi Capital survey finds that one in five small businesses (22%) say they need financing to invest in new vehicles and move to a better or better one. a larger office location.

For the coming year, securing financing will also help small businesses to:

• modernize the company’s IT and digital capacities (19%);
• make it easier for small businesses to compete with their larger competitors (19%);
• invest in new machines for the production line (17%);
• launch into new markets across the UK (17%);
• and improve the company’s website and brand (17%).

Joanna Morris, Head of Insight at Hitachi Capital Business Finance, comments:

“We are at a critical juncture when it comes to supporting the small business community and their critical contribution to the economy as a whole. Over the past three quarters, our Business Barometer study has seen small business confidence rise and stabilize. However, research clearly shows that small businesses need financing to rebuild themselves after a difficult year. They’ve already started planning and prioritizing the resources and investments they’ll need to grow through early 2021 – and without the right support some might find it hard to get back on their feet. At Hitachi Capital, we are committed to supporting small businesses with the right financial solutions tailored to specific business needs, at the same time, we provide supporting tools and resources to help businesses realize their true growth potential.

Top 10 Areas Where Small Businesses Need Financing To Grow

Small business growth forecasts for the next three months:

A comparison over successive quarters (column percentages)