UK SMBs are facing much higher costs to simply exist and survive
Business bank accounts are dwindling
When you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.
Britain’s SMEs are facing having to pay costs £10,000 higher than last year just to survive, new research has claimed.
Liberis has credited small businesses across the country for their resilience so far, but with a £22 billion SME funding gap, the report rings alarm bells about trouble on the horizon.
With dwindling support measures from the government and other authorities, SMBs are now being forced to source additional funding themselves.
SMBs are spending too much to survive
The report highlights government-led Covid Business Interruption Loans and other initiatives designed to help businesses sustain themselves financially amid the uncertain economy that followed, yet bank accounts are quickly emptying.
In June 2020, the average SME bank account balance was £16,000. Three years later in July 2023, this had dropped to £2,000. These figures come from an analysis of the UK’s small business sector using Open Banking data.
Liberis Chief Risk Officer Alex Ivison said: “Since the onset of the COVID-19 pandemic in 2020, the UK economy has experienced one of the most significant inflationary challenges in four decades.”
Ivison added that the ongoing Cost of Living crisis has received plenty of coverage in recent months, but “the escalating Cost of Doing Business has received relatively sparse coverage.”
Are you a pro? Subscribe to our newsletter
Sign up to the TechRadar Pro newsletter to get all the top news, opinion, features and guidance your business needs to succeed!
The report citesgovernment data, which reveals that SMEs account for 99.9% of the business population. At the beginning of this year, there were 5.6 million UK private-sector businesses, 5.51 million of which had fewer than 50 employees.
Liberis also refers to a pre-pandemicreport by the Bank of England, claiming that there is an SME funding gap of £22 billion in the UK. Furthermore, mainstream lenders are increasingly withdrawing credit to small businesses, making it harder for them to borrow money.
Looking ahead, it’s clear that a two-pronged approach is needed to tackle unnecessary expenses and increase revenue.
More from TechRadar Pro
With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!
LG Electronics sets ambitious B2B revenue goal to offset declining consumer demand
New fanless cooling technology enhances energy efficiency for AI workloads by achieving a 90% reduction in cooling power consumption
Phishing attacks surge in 2024 as cybercriminals adopt AI tools and multi-channel tactics
