Over 70 per cent of UK small- and medium-sized enterprises (SMEs) are bouncing back from Covid, with more than a third planning to use alternative finance in future, research has found.
A survey of 250 SMEs from alternative lender Capify has revealed that 45 per cent of SMEs have already hit or surpassed pre-pandemic levels of turnover and 26 per cent expect to achieve this within a year.
One in three businesses expect to need financing during the next 12 months. 41 per cent said they would look to traditional lenders for future loans, followed by 39 per cent who would use alternative finance lenders.
Many SMEs pivoted during the crisis and benefited from state-backed support.
Nearly half (48 per cent) have adapted their business models to survive during lockdown, which included launching online and adopting new services or products.
The bounce back loan scheme (BBLS) was the second most popular government support used during Covid, taken up by 55 per cent of SMEs and only beaten by the coronavirus job retention scheme (CJRS).
“It’s fantastic to see that the majority of UK businesses are enjoying strong performances following the easing of lockdown restrictions, with many reaping the rewards of adapting their business models during the pandemic,” said John Rozenbroek, chief operating officer and chief commercial officer at Capify.
“The CJRS and BBLS clearly played important roles in keeping SMEs ticking over, but it’s also important to note that many small businesses went without much government support, having fallen through the gaps of various support schemes.
“Alternative finance has played a huge part in propping up and supporting businesses through the challenges of the last 18 months, and our data shows that as an industry, it is now being considered by SMEs just as much as traditional lending options like high street banks.
“Despite the easing of restrictions, Covid-19 continues to impact SMEs with 54 per cent of survey respondents saying uncertainty over the future will be their number one challenge during the next 12 months.
“There is still a long way to go on the road to recovery for SMEs, even following the end of financial support from the government, which is why alternative lenders like ourselves will need to be working closely with them.
“SMEs make up an incredible 99 per cent of the UK’s business population, and have companies across so many sectors have proven their resilience repeatedly, so it’s crucial for the economic recovery that SMEs continue to grow and succeed.”