Home Business NewsBusinessBusiness Growth News Urgent call for more accessible finance options with 34% of SMEs at risk of closure

Urgent call for more accessible finance options with 34% of SMEs at risk of closure

by LLB Finance Reporter
23rd Apr 24 11:40 am

A survey of 500 SMEs by invoice finance company Novuna Business Cash Flow, highlights the critical need for more accessible and flexible financing options for small and medium-sized enterprises if they are to survive.

The survey revealed a concerning statistic: 34% of SMEs are at risk of closing their doors permanently if they are unable to secure necessary funding.

This alarming figure contrasts sharply with the surprising revelation that 50% of SMEs have not sought any form of financial assistance since November 2023, despite the precarious position many find themselves in.

The reluctance to seek financing during these difficult times can be attributed to a variety of factors. A significant portion of respondents (43%) believe that the current economic conditions have exacerbated the difficulty of accessing funding. Additionally, a concerning 28% of the businesses surveyed reported being turned down for funding since November 2023, further discouraging attempts to secure much needed financial support.

Highlighting the urgency of the situation, nearly a third (29%) of SMEs surveyed have found themselves applying for business funding for the first time ever since November 2023. This statistic not only reflects the growing financial strain on businesses but also the changing landscape of SME financing.

These findings highlight the urgent necessity for enhanced and adaptable financing solutions for SMEs to ensure their survival. By providing a broader range of financial assistance and support, we can safeguard the future of these essential pillars of our economy.

John Atkinson, Head of Commercial and Strategy at Novuna Business Cash Flow said, “In light of our recent survey findings, it’s clear that SMEs are facing unprecedented financial challenges, with 34% on the brink of closure due to funding shortages.

“Surprisingly, half of these businesses haven’t even applied for financial help since November 2023, a decision influenced by tougher access to funds and previous rejections.

“As we navigate these turbulent times, our focus must be on creating a more supportive financial environment that acknowledges the evolving needs of small and medium-sized enterprises.

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