Magazines
Newsletter
Advertise
Search
The Business Magazine - B2B Business News - Site Logo
The Business Magazine - B2B Business News - Site Logo
The Business Magazine July 2024
Read now
PICK YOUR EDITION

SMEs confident of growth next year but challenges persist post Budget

The Business Magazine article image for: SMEs confident of growth next year but challenges persist post Budget
Credit: iStock
20 December 2024
Credit: iStock

New research from alternative lender ThinCats has shown that SMEs are confident they will grow next year but that challenges persist post the October Budget.

The research was conducted among over 2,000 UK small and medium-sized firms (SMEs) after the Chancellor's Autumn Statement on October 30.

READ MORE: Lender ThinCats reaches £2bn funding milestone for SMEs

The firms put the three biggest challenges ahead as: The general economy (people and companies delaying decisions or not spending) according to 37% of those surveyed, followed by cost inflation (37%) and competition (29%). After that, came energy (26%) and staffing costs (23%).

Despite this, 81% of businesses said they were confident that their business would grow next year.

Confidence was highest among mid-sized businesses (employing 50-249 people) at 86%, compared to 70% of small businesses (1-49 employees) and 64% of sole traders.

Notably though, just under half (49%) of businesses said that in the light of the Budget, they were confident that the Government was creating an "environment for business growth".

Ravi Anand, managing director of Birmingham-headquartered ThinCats, noted that, overall, the survey and the firm's direct feedback from its borrowers, set up 2025 to be a "bumper year for organic and inorganic growth for mid-sized SMEs".

But he added: "Post-Budget, we know from speaking to many borrowers and corporate finance advisors that there is both a sense of relief and frustration which is borne out in this survey.

"The relief is that for the first time in a few years, businesses are able to plan ahead with some certainty of the broader fiscal and political environment.

"There is however clear frustration with the impact of changes in NICs and the minimum wage, especially in sectors such as care homes and hospitality, and in the end consumer and employers will largely bear the impact of these changes," he added.

"Our survey highlights that mid-sized business are highly confident of growing in the next year and government can assist with greater clarity its growth initiatives, particularly assisting with the skills gap.

"Debt continues to be key enabler of growth and the survey highlights the continued rise of alternative lenders as key source of capital."

The survey showed that 53% said the changes to employer NICs would affect their business negatively. 39% also highlighted the impact of the increase in the national minimum wage.

When asked how they plan to respond to the NICs increases, 37% said they intended to increase customer prices, 31% said they would reduce salary increases, while a quarter (25%) said they would reduce recruitment efforts.

When asked about changes to capital gains tax (CGT) and Business Asset Disposal Relief, 27% of business owners said it would likely lead them to sell their company earlier.

ThinCats provides funding for growth, acquisitions, refinancing and restructuring and lends to a range of businesses with loans from £1m up to £20m. It recently passed the £2bn lending milestone.


Share 

Giles Gwinnett is a writer at The Business Magazine. He has been a journalist for more than 20 years and covered a vast array of topics at a range of media settings - in print and online. After his NCTJ newspaper training, he became a reporter in Hampshire before moving to a news agency in Gloucestershire. In recent years, he has been covering the financial markets along with company news for an investor-focused web portal. His many interests include politics, energy and the environment. He lives in Dorset.

Latest deal ticket

All deals

Events

All events

Related news


Group Titles

Dorset BIZ NewsHampshire BIZ News
crossmenu