One in three UK SMEs say their survival is dependent on accessing finance by the end of the year, according to new research.
A third of all SMEs in Britain fear their business will collapse if they are unable to access finance, such as a loan or credit, by the end of 2022.
A similar number (32 per cent) do not have a financial plan in place to sustain operations over the next 12 months.
The worrying numbers come from new research from financial comparison site NerdWallet, which also found that securing finance has become more difficult in the eyes of many business leaders. Over two fifths (41 per cent) of SMEs said finance has become less accessible than it was a year ago.
Moreover, 31 per cent of UK SMEs applied for at least one form of business finance – such as a business loan or credit card – in the first half of 2022.
However, a fifth (20 per cent) had a finance application rejected since the beginning of the year despite having a good or excellent credit score.
“UK SMEs have been forced to overcome many challenges over the past two years. From the pressures of Covid-19 to soaring inflation, it is unsurprising that so many need to access finance to maintain operations,” said Connor Campbell, a finance expert from NerdWallet.
However, SMEs must not feel disheartened. While they may feel as though traditional banks are less willing to lend money, there are still a lot of alternative options available for them to consider, Campbell stressed.
“Peer-to-peer loans, invoice financing, and equipment financing are all potential options that can provide vital resource to keep operations running,” he said.