UK small businesses are becoming more confident in their ability to grow and power the economic recovery, although many are still concerned about the ongoing impact of Covid restrictions, research has found.
Peer-to-peer lender Funding Circle and the British Chambers of Commerce (BCC) surveyed more than 1,000 firms, almost all of which are small- and medium-sized enterprises (SMEs).
It found the majority (63 per cent) are emerging from lockdown with either concrete plans or intentions to grow their business over the next 12 months.
The manufacturing sector (68 per cent) is particularly optimistic, while nearly 58 per cent of the hardest hit business-to-consumer firms such as hospitality, catering and retail, still anticipate growth.
More than half (53 per cent) said they had already restarted or returned to pre-pandemic levels in April, with a further 27 per cent expecting to reach this milestone by October.
By the end of the year, 91 per cent of businesses expect to have fully restarted, with only one per cent not anticipating to restart for the foreseeable future.
However, businesses are worried about Covid with 38 per cent concerned about the risk of further lockdowns and 37 per cent citing fears around social distancing requirements.
This was followed by concerns around reduced customer demand (33 per cent), inflation pressure (18 per cent) and recruitment difficulties (14 per cent).
Nearly half (44 per cent) of companies believe access to finance will help overcome the remaining barriers they face.
“While the road to recovery won’t be straightforward, it is great to see SMEs are looking towards the future with such optimism,” said Lisa Jacobs, Europe managing director at Funding Circle.
“From our conversations with customers, it’s clear their appetite to invest in their businesses is as high as ever. We’re ready to continue helping them access the finance they need to overcome the remaining hurdles they face, and achieve their growth ambitions.”
“The ability of businesses to bounce back from the devastation caused by Covid is a huge testament to their resilience,” said Claire Walker, co-executive director of the BCC.
“Although, the financial support put in place by the government to help many through the last 12 months will have played a crucial role.
“The government must now clarify the future of safety measures, such as social distancing, and set out a clear package of support that would be available should further restrictions be imposed on businesses this year, or in the years to come.”