Small- and medium-sized enterprises (SMEs) are increasingly planning for their future, helped by the government’s Covid-19 support schemes, research has shown.
The SME Finance Monitor, produced by BVA BDRC and commissioned by UK Finance, revealed that 42 per cent of SMEs said their plans were future-focused in the third quarter of 2020. This compares to 25 per cent who were still focused on the immediate impact of the pandemic.
Prior to the stricter restrictions introduced in October and November, the research showed improvements in business outlook with 40 per cent of SMEs feeling positive in the second quarter. This was up from 25 per cent in the previous quarter.
This comes as the overall proportion of businesses utilising finance increased from 30 per cent in the second quarter to 40 per cent in the third quarter.
During July, August and September around nine in 10 SMEs who applied for coronavirus-related finance were successful.
“The banking and finance industry is providing an unprecedented package of support to help businesses through these tough times, including supporting nearly 1.5 million businesses through government-backed lending schemes,” said Stephen Pegge, managing director of commercial finance at UK Finance.
“Despite the considerable challenges which remain, it’s encouraging to see that a growing number of businesses are now able to look ahead to the future and access the support they need to prepare, with nine in 10 SMEs who applied successfully securing finance.
“The industry continues to work closely with government, regulators and business groups to ensure SMEs have access to the best support, information and guidance.
“Through our Let’s Talk Business campaign, we are encouraging all businesses to contact their finance providers now to discuss how best to prepare and consider any additional financing needs.”
The proportion of SMEs expecting to struggle with revenue in the coming months halved from 60 per cent in the second quarter to 30 per cent in the third.
In the third quarter, a fifth (19 per cent) of SMEs saw opportunities for their business.
However, challenging conditions persisted, with three quarters of SMEs reporting being negatively impacted by Covid-19.
The SME Finance Monitor found reported growth in the past 12 months reached 2.5 per cent, the lowest level seen to date.
During the third quarter, 32 per cent of SMEs said the future represented threats, with uncertainty around how Covid-19 restrictions might change and the end of the Brexit transition period on 31 December approaching.