The proportion of small business leaders that cite barriers to growth has jumped from 75% to 91% in the last six months, according to Hitachi Capital Business Finance.
This correlates to the sharp fall in the percentage of small businesses that predict growth (falling from 39% to 14% in the last three months).
A tracking study now in its fifth year, Hitachi Capital Business Finance asked a nationally representative sample size of 1,268 small business leaders which barriers were holding their businesses back from growth.
Since the outbreak of Covid-19, there has been a fall in the percentage of small businesses worrying about general economic uncertainty linked to Brexit (down from 53% to 49%), an issue that dominated their outlook last year. Instead, as a result of the pandemic, more businesses are looking at their own business plans and are more concerned over the future of their business (up from 27% to 32%). This trend was mirrored across all key industry sectors.
As some business sectors prepare to come out of lockdown, around half the respondents also mentioned additional specific challenges that they regarded to be barriers to getting their business back on track in the post-lockdown era. Volatile cash flow was a key challenge and many small business leaders implicitly felt high street banks were not being as supportive as they could be.
Looking across industry sectors, there has been a significant rise in the percentage of small businesses that currently perceive barriers to growth. During 2019, with concerns over Brexit, the net percentage of small businesses that worried about barriers holding them back was regarded to be high.
Six months on, the advent of Covid-19 has taken fears to a new level. The issues that businesses were concerned about were even across sectors, the significance is the net rise in the number of small business owners that perceive barriers to growth.
Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance said, “In recent weeks many have celebrated news on the gradual lifting of lockdown restrictions, but now is the time to be sensitive to the real challenges that small businesses face when they re-open their doors for business.
“Our latest findings make clear the scale of the challenge with nine in ten business owners feeling there are things holding them back.
“Market related factors from Brexit and Covid-19 are hard to deal with, but there are also specific issues relating to red tape, cashflow and finance that can be tackled. At Hitachi Capital Business Finance we are committed to helping small business customers to get back on their feet.
“We are investing in information resources and help guides and we are committed to help established enterprises to secure the right finance that will help their business to grow.”