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November 8, 2023
Many small firms in the UK face challenges when it comes to finding and applying for funding, according to a report published by the Federation of Small Businesses (FSB).
Two thirds of small firms (66%) plan to make some form of investment in their business by 2024, but under half (49%) feel they are fully aware of the different types of financing options available to them, new research has found.
FSB’s new report, Credit Where Credit’s Due, draws together findings which paint a concerning picture around access to finance for UK small businesses, and calls for action to stop the lending gears from grinding to a halt – as happened after the 2007 credit crunch – which, if history is allowed to repeat itself, would risk undermining the country’s economic recovery.
Three in five small firms (59%) have applied for finance over the past five years, although the extraordinary circumstances of the pandemic meant the proportion of businesses taking on debt – many of them for the first time – grew. Small and medium-sized enterprises are now collectively carrying around £36 billion more in debt than they were in January 2020, pre-Covid.
Access to finance is vital for the small business sector as a whole, allowing firms to invest and grow. Finance options are also vital to keep small businesses afloat in choppy waters due to the cost of doing business crisis, skyrocketing energy costs, supply and travel disruption, and the ever-present scourge of late payments.
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