Half of the SMEs have not pursued financial aid since November 2023. Credit: cowardlion/Shutterstock.

A recent survey by Novuna Business Cash Flow has highlighted a dire need for more accessible financing options for small and medium-sized enterprises (SMEs) in the UK.  

The survey, encompassing 500 SMEs, revealed that 34% of SMEs face potential closure without vital funding. 

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Half of the SMEs have not pursued financial aid since November 2023, despite the looming threat of insolvency.  

A considerable 43% of respondents cited the tough economic conditions as a barrier to funding while 28% have experienced rejection when applying for financial support since November 2023.  

The report highlighted these as likely factors for the reluctance among SMEs to seek out necessary funds. 

The urgency for improved financial options is further highlighted by the fact that nearly one-third (29%) of the surveyed SMEs are applying for business funding for the first time.  

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This indicates not only the increasing financial pressures on these businesses but also a shift in the SME financing landscape. 

Novuna Business Cash Flow head of commercial and strategy John Atkinson said: “In light of our recent survey findings, it is clear that SMEs are facing unprecedented financial challenges, with 34% on the brink of closure due to funding shortages.  

“Surprisingly, half of these businesses have not even applied for financial help since November 2023, a decision influenced by tougher access to funds and previous rejections. As we navigate these turbulent times, our focus must be on creating a more supportive financial environment that acknowledges the evolving needs of small and medium-sized enterprises.” 

Last month, the Federation of Small Businesses (FSB) reported that small businesses are adopting a cautious approach, with growth expectations for this year being tempered by the challenge of late payments.