iwoca research reveals top 5 SME concerns in 2023


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iwoca research reveals top 5 SME concerns in 2023

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  • As the Chancellor unveiled a raft of economic measures in the recent Spring Budget, research from small business lender iwoca reveals the top concerns of SMEs
  • Topping the list: a third (32%) of finance experts say that SMEs are most concerned about increased business running costs
  • Brokers also highlight SME concerns around having to close their business as well as dealing with higher interest rates (11% each)

As Chancellor Jeremy Hunt announced measures intended to lift the UK economy in the Spring Budget, data from iwoca highlights what small businesses were most worried about as they entered 2023.

Small business lender iwoca’s latest SME Expert Index data – based on UK finance brokers who submit over 2,000 SME finance applications a month – reveals a third of experts (32%) report increased business running costs as small businesses’ top concern. The Budget statement contained a number of measures which touched on these worries.

Also featured in the top concerns list were higher interest rates, and having to close the business (according to over 1 in 10 brokers respectively).

Top SME concerns

(full SME Expert Index Q4 2022 data here)

  1. Increased business running costs, 32%
  2. Recession, 12%
  3. (=) Having to close their business, 11%
    (=) Higher interest rates, 11%
  4. Access to finance, 9%
  5. Ability to hire or retain staff, 7%

Whilst inflation is set to fall over the course of the year, SME owners may see other costs rise as Corporation Tax increases to 25%.

Fifth on the list of concerns was the ability to hire and retain staff (according to 7% of brokers). The Chancellor introduced a raft of measures encouraging workforce participation in the Budget, through expanded access to childcare and skills training for over-50s. Although this could be a concern for some SME owners (and is a priority for the Government), it doesn’t seem to be as much of a priority for the segment of business owners when surveyed for iwoca’s Q4 SME Expert Index.

Colin Goldstein, Commercial Growth Director at iwoca, said: “Small and medium-sized businesses across the country are searching for financial support as they endure uncertainty. Whilst forecasts tell a more positive than expected story for the UK economy this year, the reality on the ground for many SMEs will still be difficult, characterised by high costs and reduced consumer spending. Access to finance during this period becomes even more vital to keep them on track.”

SME Expert Index

This SME Expert Index from iwoca provides a snapshot on what’s driving small business owners to borrow, the trends seen in the types and value of finance being accessed, and how these patterns change as the country navigates economic shifts in the market. iwoca publishes this index every quarter to capture the experience of brokers working with small businesses.

1. When presenting two competing loan offers for unsecured finance to your clients, which factor would you say is the most impactful?

Q1 21Q2 21Q3 21Q4 21Q1 22Q2 22Q3 22Q4 22Q1 23
Approved amount25%23%20%17%15%18%21%29%23%
Cost of finance62%59%62%67%64%65%68%55%53%
Length of loan6%9%15%9%12%6%7%9%15%
Flexibility of product7%9%2%7%9%12%4%8%9%

Charlotte was a UK PR Manager at iwoca. She's been sharing news and insights about the finance industry for over four years.

Article updated on:
March 30, 2023

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