UK SMEs Struggle Without Support, as 73% Can’t Even Secure a Meeting With Their Bank
Interest rates and trading costs have been rapidly rising, while SME survival rates continue to take a hit. But when business owners need support the most, many SMEs in the UK are feeling unsupported, independent polling agency Censuswide reveals.
Seventy-two per cent of SMEs in the UK feel that their banking partners are providing limited support during the current economic crisis. Around 73 per cent of respondents revealed they actually struggle to even secure a meeting with their bank or financial manager at any given time.
“SMEs are the fabric of our economy and require as much support as possible to avoid catastrophe,” Lynne Darcey Quigley, CEO and founder of cloud-based credit management platform Know-it, explained.
The Federation of Small Businesses found that SMEs account for around three-fifths of the employment and around half of the turnover in the entire UK private sector. SMEs employ around 16.4 million people (61 per cent of the total), while turnover from these companies is around £2.1trillion (51 per cent).
Meanwhile, employment in small businesses (with under 50 employees) was 12.9million (48 per cent of the total), with a £1.6trillion turnover (36 per cent).
Lynne Darcey Quigley, added: “Following the opening up of the country following the pandemic, SMEs came out of the proverbial frying pan and straight into the fire of the current economic turmoil. Such an overwhelming negative sentiment towards banking partners from SME owners should not occur ever, but especially during an economic crisis. The banking sector’s short-sighted approach to prioritising the needs of larger clients will prove to be damaging in the long run.”
Helping SMEs through a “difficult period”
SME bosses also said plans for international and overseas trade were scuppered by high trading costs. Seventy-two per cent felt bank transfer fees abroad were too high and should be reduced for smaller companies.
Neh Thaker, co-founder of international finance solution provider HedgeFlows, which commissioned the research, said: “The time has come to equip SMEs with a level playing field to expand internationally, giving them access to a suite of services required to manage overseas transactions, currency conversions and cashflows.”
Although 69 per cent said their company would benefit from international expansion, 65 per cent feel they currently lack the financial expertise to open an office overseas. Another 78 per cent admitted that their company have limited cash reserves as inflation rises and as economic conditions remain uncertain.
Darcey Quigley discussed how SMEs have other options for support available, aside from banking partners: “Thankfully, SMEs can lean on other support foundations other than banking partners these days. The latest technologies can provide SMEs with automated and fully integrated services to help them through this difficult period. Solutions such as end-to-end credit management, automated payroll and invoice financing are just some of the tools now on offer which can assist SME survival.”
This article was first published by The Fintech Times.