With predictions that the UK economy is set to grow at its fastest pace in 80 years and could recover to its pre-pandemic size by the end of this year, SME owners are feeling more optimistic and are keen to invest in growth.
However, they are also frustrated by the mix of financial options open to them, according to a survey from the Association of Chartered Certified Accountants (ACCA) and The Corporate Finance Network (CFN).
A total of 89 per cent of owners are reporting that they were trading at or above the expected levels in July, which is a big increase from the previous month’s figure of just 60 per cent.
They have also shown a surge in confidence over the last few weeks, with almost 90 per cent expecting to return to pre-COVID levels of turnover and productivity within two years – 40 per cent more than thought this was possible in June.
That is why more than 28 per cent of SMEs have brought forward plans to obtain additional finance to invest in their business.
However, this positive energy and ambition is being held back by struggles to find the right mix of financing for success. Two-thirds of business leaders (67 per cent) have found it more difficult to obtain even an overdraft from their bank in recent weeks.
Meanwhile, one-third have also struggled to finance their growth for the next year with other traditional options, including mortgages or finance leases.
The difficulties SMEs are facing come at a time when they are desperate to re-establish their businesses and put themselves on a solid financial footing for growth.
Around one-third have forecast their financial requirements for the next 12 months, but they are having problems accessing commercial finance facilities, following the closure of many of the Government-backed support schemes and the slow rollout of the Recovery Loan Scheme launched in early April.