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August 26, 2021

Financial support lagging behind small business optimism

By Joe Pickard

Small business owners are feeling optimistic about the prospect of trading getting back to normal but are still struggling with their mental health and finding financial support, according to the latest survey results from ACCA UK and The Corporate Finance Network’s (CFN) SME Tracker.

All owners reported that business trading is at the level they expected or slightly higher this month, a jump of 11% over last month.

There was also unanimity from 100% of respondents that their businesses will return to pre-Covid levels of productivity and turnover within two years, with more than half (57%) believing they will achieve that goal within 12 months.

However, despite the optimism, about their own prospects, business owners continued to report on the struggle to find suitable financial backing from traditional outlets now that government-backed loans are winding down.

More than half (57%) said they found it more difficult to obtain even an overdraft and the same percentage struggled to obtain an unsecured business loan. Others also had problems qualifying for a commercial mortgage (43%), which was a 10% increase from last month.

More than one in five (22%) said they were more stressed and anxious and 19% reported that they were either not sleeping, feeling unable to cope or that their mental health had deteriorated.

ACCA UK head of policy, technical and strategic engagement Glenn Collins said: “Our survey shows business owners are still struggling to secure the right financial support.

“They are telling us that conventional and traditional sources of business finance, such as banks, are lagging behind and are making it difficult for them to complete even the most basic functions like opening bank accounts and securing an overdraft.

“We would like to see government working with finance providers to improve access to the right finance options to help to support recovery and we will be engaging with both parties on this matter.”

The SME Tracker, which reports what small businesses tell their accountants, reported data from accountants representing 12,135 SME clients and ran until 25 August.

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