Economic uncertainty is escalating among the UK’s 5.6 million small and medium-sized enterprises (SMEs) following the Autumn Budget, as revealed by the Q3 2024 SME Expert Index from business finance provider iwoca.
The percentage of brokers reporting pessimism among their SME clients about the future has more than doubled, rising from 15% last quarter to 34%.
Go deeper with GlobalData
According to iwoca, 36% of brokers reported that small and medium-sized businesses are feeling optimistic, a decrease from 56% in the previous SME Expert Index.
This reflects growing anxiety, as concerns about economic downturns have resurfaced among SMEs.
Nearly half of the brokers (47%) indicated that SMEs are worried about the possibility of a recession, up from 35%.
This marks a shift from a year-long trend in which concerns about a recession had been gradually diminishing.
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 GlobalDataDue to increasing financial pressures, SMEs are now prioritising survival over growth.
Managing cash flow has become the top reason for loan applications, according to 61% of brokers, from 49% a year ago.
Only 36% of brokers now report that their SME clients are pursuing loans for growth, marking the lowest level since Q3 2023.
With rising costs and growing economic uncertainty, SMEs are now turning to larger loans to maintain operations and weather the storm.
Nearly half of brokers (45%) expect a notable rise in loan applications exceeding £100,000 ($126,526) in the next year, up from 28% last quarter.
High-value loans are becoming more crucial, with 15% of brokers anticipating an increase in applications for loans over £200,000.
Reflecting this trend, iwoca has doubled the maximum amount available through its flagship Flexi-Loan, allowing SMEs to apply for up to £1m in finance.
iwoca UK chief commercial officer Colin Goldstein said: “Rising pessimism and fears of a recession are reshaping SME mindsets, with a greater focus on survival over growth. We have seen a surge in demand for larger loans from businesses looking for extra financial stability in uncertain times.”
In August, The SME Finance Taskforce, which counts iwoca as a member, launched a plan to enhance financial access for UK SMEs.
