What next for SMEs? At the turn of a decade…

Chirag Shah is chief executive at Nucleus Commercial Finance

As we look ahead to entering a new decade, there is no doubt that the end of this last decade has been challenging for SMEs.

Political and economic uncertainty caused by Brexit has clearly had an impact on businesses across the country. This is not just in terms of confidence but also to their appetite for finance to deliver their goals.

With SMEs accounting for 99% of all UK businesses it’s important that they invest in their future to stay ahead of the curve and maximise the opportunities open to them.

However, having faced a prolonged time with a lack of clarity, many businesses have become increasingly reluctant to plan for the future and have consequently adopted a wait and see approach.

Our own research shows that more than half (54%) of SME owners said that the ongoing process surrounding Brexit has impacted how they ran their business in 2019, and a further 11% have put off future planning and strategy as a result of lack of political clarity.

Brexit needs to be resolved sooner rather than later in order for SMEs to feel confident in accessing the finance they need to thrive.

Increasing certainty for businesses will support them in overcoming both the mental hurdle and practical process of securing finance.

Between June 2018 and June 2019, a fifth of SMEs put capital injection on hold, with Brexit as the main concern – and this number needs to fall in 2020.

As the solution to Brexit nears in 2020, it is clear to us that businesses will emerge with more purpose and passion to drive their own success.

Once Brexit is resolved, it will be easier for businesses to access finance and they will need the right support and advice to find the finance that fits their circumstances at that moment.

Over the past three years, many lenders have restricted lending to certain sectors; and once uncertainty dissipates, we expect to see lenders relax criteria and for businesses to start reinvesting in their futures.

The increased availability of capital that we’re expecting to see will support UK SMEs in delivering growth and achieving their ambitions.

In turn, this is essential to driving our economy forward and providing job opportunities.

In 2018 alone, SMEs were responsible for a combined annual turnover of £2tn and employed 16.3 million workers.

As we step into 2020, we expect to see SME owners ramp up on recruitment, ultimately providing a boost to GDP activity.

As 2020 begins and we emerge from years of uncertainty, we encourage businesses to be nimbler and more aggressive in terms of growing revenue.

Look ahead, be ambitious and realise the potential of what’s in store for their business.

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