Various factors have affected the economic stability of UK Small and Medium Enterprises (SMEs), but despite the challenges, 88% of these businesses plan to seek business finance and credit this year.
Majority Seeks Business Finance and Credit
Only 12% of SMEs stated they have no plans to borrow money in the next 12 months, but this figure rises to 29% when including sole traders and micro businesses.
The interest rates are still at record levels, which will impact UK businesses financially.
Why Borrow Money?
Small and medium-sized businesses are borrowing money not just to patch holes but also to seize growth opportunities (38%) and help employees with the rising cost of living (34%).
A similar number stated they plan to borrow to make the business more environmentally sustainable.
Impact of Rising Costs and Financial Stress
Despite the positive outlook, rising costs and financial stress are still affecting UK SMEs.
A third of these businesses expect to use business finance to cover unavoidable rising overheads, while 20% will use it to pay off existing debt.
The findings of the research carried out by Nucleus Commercial Finance (NCF) reveal the challenges and opportunities UK SMEs face in their quest for growth and sustainability.
As interest rates remain high, borrowing will continue to play a significant role in helping these businesses achieve their goals.