Small business owners are increasingly concerned about the growing funding gap, exascerbated by economic factors such as Brexit. A new study, commissioned by insurer Hiscox, has found that 38 per cent of respondents accessed funding through the European Union. The survey also explored other influences on the financing of Britain’s SMEs, and found that 31 per cent of businesses claimed economic uncertainty was the biggest factor impacting growth over the past five years. The Federation of Small businesses has previously warned about a funding gap and predited that the UK will have to find billions of pounds worth of funding to replace that lost when the country withdraws from the EU. Between 2014 and 2020, the UK saw £3.6bn worth of small business support from the EU. Mike Cherry, FSB National Chairman, said: “Small businesses across the country are staring into a business support black hole from 2021. This is a particularly pressing issue for the many small firms with growth ambitions and those in less economically developed regions. “If the next government is serious about developing an industrial strategy that delivers prosperity across all areas of England, it must replace EU funding dedicated to small business support and access to finance after we leave the EU.” “A shock to the business support landscape will have serious implications for small business aspirations as well as efforts to improve productivity and rebalance the economy.” The FSB laid out its recommendations in its report, “Reformed Business Funding: What small firms want from Brexit” back in May. In addition, the Hiscox survey reported that the majority of business owners surveyed were still relying heavily on banks for funding – three quarters said they had used bank loans for funding in the last five years. Around 36 per cent of business owners said a lack of choice was the biggest problem faced when trying to source funding, and 20 per cent were unaware of the variety of alternative funding methods available to them.
This article is part of a wider campaign called the Scale-up Hub, a section of Real Business that provides essential advice and inspiration on taking your business to the next level. It’s produced in association with webexpenses and webonboarding, a fast-growing global organisation that provides cloud-based software services that automate expenses management and streamline the employee onboarding process.
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