SMEs
After the disaster of 2020, SMEs are upbeat about 2021
Recently commissioned research into the strength of feeling among brokers and SME leaders about the UK business environment found reasons to be cheerful about 2021, writes Carol Roberts, Time Finance’s head of asset finance.
With so much of the world – and its businesses – in flux, this year has already delivered several shifts when it comes to expectations and predictions.
As the nation grapples with the shape of things to come and the post-Brexit era, we undertook research to investigate current attitudes amongst brokers and business leaders.
I believe the results reveal an optimistic look to 2021, despite the challenges thrown at us so early on.
Our survey revealed that 65% of business owners were feeling confident they would survive a further hit to the economy, with just 30% feeling uncertain. Comparatively, 50% of brokers stated being ‘uncertain’ about the likely impact this would have – perhaps unsurprising given the necessary degree of caution to advise accordingly.
How to interpret these findings? Given the injection of government funding packages for businesses last year and the continued support from alternative financiers, never have so many businesses taken advantage of the lifelines available to them.
In the current climate, access to funding can mean the difference between success and failure and UK business leaders are quickly realising that access to funding offers so much more than a cash injection; it instils confidence and peace of mind for the future.
Lockdown 3.0
How have attitudes shifted? If our lockdown learnings have taught us anything, it’s that business owners display clear signs of resilience and strength in times of uncertainty, and 2021 is no different.
After overcoming the first lockdown, 82% of business owners were feeling more equipped and better prepared for future national lockdowns, and brokers were no different. We engaged with intermediaries across the industry to gain their insight.
Based on the views of those on the ground working tirelessly to deliver solutions, the desire to drill down to identify long-term solutions has been critical. While the government and the wider nation focused on the short-term assistance to ensure as many as possible could stay afloat, brokers have simultaneously kept one eye on future sustainability, considering how support can pave the way to a brighter future.
I consulted an industry colleague Mark Millhouse, from PMD Business Finance, he said: “This time around we’re seeing businesses feeling more optimistic than previously. I think it’s fair to say that our industry has had a significant role to play in this by demonstrating that no matter the circumstances, our doors will remain open with us endeavouring to find a solution that will drive that business forward."
It’s certainly been an interesting and challenging year but there has undoubtedly been resilience in the market - on all sides. With that determination to carry on and a reluctance for failure, businesses are finding new ways to move forward.
Embracing Brexit
With Covid-19 taking the spotlight in global news stories, Brexit has naturally fallen under the radar. Despite this, funders and advisers have been working hard to accommodate the challenges and uncertainties posed by Brexit.
With 65% of business owners stating in Q4 that they were unsure of the likely impact of Brexit on their businesses, it now seems they’re pushing on and feeling less deterred.
With positivity slowly on the up, our survey sought to establish whether this change in mood may impact a desire to invest. The good news is that 60% of business owners report feeling that now is a good time to invest, supported by 50% of brokers thinking the same.
Naturally, we want businesses to be optimistic and willing to invest – it is our industry’s job to take stock of that and find appropriate solutions.
A fact which is illustrated in these results.
Some industries have been hit hard by the pandemic and will struggle to recover but this certainly is not the picture across the board. For others, opportunities have been borne out of lockdown – as well as a greater requirement and desire to innovate than ever before.
For the business leaders themselves, it is their inner belief and understanding of their own industries, in their teams and in their business modelling that gives them the greatest sense of hope and optimism. Funders and advisers play a key role in championing these businesses and truly believing in their ability to make it a success.
Despite the lingering uncertainty, there are several reasons for the industry to now be cautiously optimistic. While businesses have been utilising the government loans and lower interest rates for some time (crucially helping many to get through these tough times and take advantage of new opportunities) this period of government support will soon come to an end.
At which point, businesses will be looking for assistance from alternative sources. Since one in four businesses said they would look into alternative finance solutions, the landscape may soon shift.
Carol Roberts
Time Finance