According to a new survey by Grenke, more than half (53%) of UK SMEs currently use suboptimal equipment. The New Lease of Life Report, which polled 500 SMEs throughout the UK, also discovered that nearly nine out of ten SMEs (86%) want to thrive as a firm rather than merely survive, establishing a new goal for growth for the UK economy.
SMEs currently account for more than 99% of the UK business population.
Go deeper with GlobalData
The New Lease of Life Report examines SME opinions about growth and the genuine constraints that are holding back UK businesses, as well as attitudes toward leasing and asset finance in terms of the potential for expansion it provides.
More than half (51%) of SMEs expressed optimism about their growth prospects over the next 12 months, indicating that SME decision-makers are rekindling their ambition for their companies despite the effects of the cost-of-living crisis, shifting interest rates, and banks’ lending appetites. Meanwhile, 33% of SMEs expressed pessimism.
When prompted to identify the primary problems potentially impeding growth, the SMEs questioned identified the following:
- · Energy costs (73%)
- Less or unpredictable customer demand (70%)
- Access to finance (69%)
- Cash flow issues (67%)
- Commercial rent / rate increases (62%)
Moreover, the New Lease of Life Report discovered that nearly two-thirds (69%) of businesses say access to finance has lately held their business back, with 87% of SMEs saying that at least one business area has declined or sank over the last 12 months specifically because of a lack of investment due to financing or cashflow, including hiring staff (33%), expanding into new markets (29%), marketing (28%), investment in training (25%), and launching new products.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataDespite their unhappiness, 81% of SMEs say they want to get their business back on track in the next 12 months.
Over 50% of SME company equipment is suboptimal
In addition to this, the report also stated more than half (53%) of UK SMEs presently use substandard equipment on a daily basis. Within this statistic, 17% does not work or is no longer in use, while 36% is adequate but not optimal and may benefit from improvement.
Consequently, SMEs are attempting to meet their growth goals using equipment that is no longer fit for purpose and cannot support their people, goods, or productivity.
Nevertheless, according to Grenke’s analysis, decision-makers and SME leaders acknowledge the advantages that having the right tools for growth could offer their companies:
- · 75% of SMEs said new equipment would help re-energise their business and support future growth plans
- 81% say their employees feel better and do better at work when they have the best equipment to do their jobs
- 70% agree leasing would help them to unlock growth opportunities
The lack in leasing opportunities
Just under half (44%) of SMEs presently lease business equipment, indicating that UK attitudes and behaviours about leasing have not yet caught up with the opportunity it brings to the UK SME market when compared to other types of funding, as reported by the New Lease of Life Report.
If they needed equipment within the next three months, 40% of respondents indicated they would choose a business loan, 20% said a credit card, and 13% stated leasing. Peer-to-peer loans (9%), grants (9%), and bank overdrafts (9%), among other sources, were also included.
Companies are also aware of the advantages leasing provides for their operations. In response to a question about the most alluring advantages of leasing for their company:
- · 40% said leasing would help cashflow
- 38% cited improved productivity
- 34% cited reduced operational costs
66% of UK SMEs believe that leasing equipment is the best option in the current economy, although obvious obstacles to a larger leasing uptake.
David Horton, UK MD of Sales, Grenke, stated: “Grenke is committed to empowering SME growth in the UK, and make leasing solutions more accessible and adaptive to the current business environment. This report shows just how ambitious the UK’s SME economy is. But we need to think about growth in a new way to achieve this. What’s the cost of not investing? Can your business afford to by-pass the competitive advantage that leasing offers, to constantly be playing catch-up in your market? How do we close the gap between the appetite and recognition for leasing opportunities and the reality of adoption? We know that leasing offers benefits that go beyond the financial, giving you a new way to unlock your SME’s potential and transform your business. We hope the New Lease of Life Report shows more SMEs there’s a new way to think about the growth.”
