Small businesses outline concerns ahead of Sunak's economic statement

The proportion of small business leaders that cite barriers to growth has jumped from 75% to 91% in the last six months, according to a study released today by YouGov and Hitachi Capital Business Finance ahead of Chancellor Rishi Sunak's economic statement. This correlates to the sharp fall in the percentage of small businesses that predict growth (falling from 39% to 14% in the last three months).

The coronavirus outbreak has overtaken Brexit as the top concern for small businesses as they prepare to come out of lockdown. Last year, concerns over Brexit led to growth concerns for what was then regarded as a high percentage of small businesses, but COVID-19 has "taken fears to a new level".

Since the outbreak of COVID-19, there has been a fall in the percentage of small businesses worrying about general economic uncertainty linked to Brexit (down from 53% to 49%), an issue that dominated their outlook last year. Instead, as a result of the pandemic, more businesses are looking at their own business plans and are more concerned over the future of their business (up from 27% to 32%). This trend was mirrored across all key industry sectors.

Around half the respondents identified the specific barriers to getting their businesses back on track in the post-lockdown era as volatile cash flow, red tape, banking loan restrictions and lack of understanding from lenders, as well as high bank fees and charges, the cost of skilled labour and currency issues.

Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance commented: “In recent weeks many have celebrated news on the gradual lifting of lockdown restrictions, but now is the time to be sensitive to the real challenges that small businesses face when they re-open their doors for business. Our latest findings make clear the scale of the challenge with nine in ten business owners feeling there are things holding them back. Market related factors from Brexit and COVID-19 are hard to deal with, but there are also specific issues relating to red tape, cashflow and finance that can be tackled.”

YouGov polled a nationally representative sample 1,268 small business leaders.


In numbers: Barriers to growth (Source: YouGov & Hitachi Capital Business Finance)

The percentage of small businesses that perceive barriers to growth by industry sector.

Q2 2020 Q4 2019
Manufacturing 94% 87%
Construction 93% 71%
Retail 91% 80%
Finance & accounting 90% 77%
Hospitality & leisure 96% 81%
Legal 94% 66%
IT & Telecoms 87% 73%
Media & Marketing 93% 81%
Medical & Health 95% 56%
Education 91% 65%
Transport & Distribution 92% 79%
Real estate 81% 75%
Agriculture 80% 78%

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