UK SMEs Forced to Borrow or Raise Nearly £50K to Survive Inflationary Crisis: Report

Nucleus Commercial Finance research highlights the scale of the challenge facing UK SMEs:

  • 65% of SMEs are finding the current cost-of-living crisis is proving more of a burden on their business than the pandemic lockdowns
  • Just 33% believe the cost-of-living crisis is proving less of a burden than the pandemic lockdowns
  • An average of £34,433 has been borrowed or raised to support the impact the current energy/inflationary crisis has had on the finances of their business by SMEs.
  • This rises to an average of £49,613 among small/medium-sized businesses (companies with 10- 249 headcount)
  • Almost two-thirds (64%) of small/medium-sized business have had to borrow or raise any money as a result of the current energy/ inflationary crisis

When asked what single measure would provide the greatest boost to their business at the present time – the top 5 options among small and medium-sized businesses were:

  • Re-joining the European Union (19%)
  • Having more tax incentives for innovation/ investment (18%)
  • Improving internal IT/ tech capacity and capability (11%)
  • Having more time to concentrate on innovation and growth (9%)
  • Having greater childcare support from the government (9%)

Chirag Shah, CEO and Founder of Nucleus Commercial Finance commented:

“The scale of the current economic challenge facing UK SMEs vastly exceeds that of the pandemic according to those at the coalface. This is forcing businesses across the UK to reassess their investment and growth strategies, closely examine their overheads, and, more often than not, lean on additional finance just to keep the lights on. In fact, the average amount that small and medium sized businesses have had to borrow money as a result of the current energy and inflationary crisis is now a staggering £50,000. As the crisis continues, the situation is becoming increasingly perilous and UK SMEs need help, badly.”

As noted in the update:

“While some investment commitments were set out in the recent Budget in a bid to kickstart the economy – there is no silver bullet. Crucially, what cannot be allowed to happen is stagnation. Failing to properly support SMEs in the short-term will wreak havoc on the long-term prospects for the UK as a whole.”

Methodology

Research carried out “between 9th– 13th February 2023 among 500 senior decision makers in UK small and medium enterprises.”

As mentioned in the announcement, Nucleus Commercial Finance claims it is “a leading Fintech ensuring businesses get bespoke funding solutions at lightning speed.”

They’re armed with technology which enables them “to provide decisions and funds rapidly, with accuracy and fairness every time.”

With funding between £3k and £5m through both secured and unsecured products, their customers “have plenty of choice and flexibility to help them thrive.”

The innovative tech has meant they’re able “to streamline and automate the entire process to deliver a hassle-free, effortlessly simple funding journey for both direct customers and the introducers we work with.”

Through investments in artificial intelligence and machine learning, they “transitioned seamlessly to being a leading Fintech with innovative technology at its core.”

Using their CRM myNucleus, introducers can “upload deals, track their progress and provide their clients with a decision in just minutes.”

They’ve reportedly “received over 35,000 proposals and approved over £800M through myNucleus so far, thanks to our clever auto-underwriting system working its magic behind the scenes.”


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