Accountants survey

Nine in ten SMEs ‘will not be raising new funds’

Money

Firms say they will not raise more finance

More than 90% of Scottish SMEs will not be seeking finance to grow in the next six to 12 months, according to new data.

Ongoing uncertainty and debts accumulated during the pandemic are impacting on business owners’ plans, with the vast majority of SMEs (92.4%) not seeking finance to grow in the next six to 12 months, compared to the UK average of 81.7%.

The data is based on responses from accountants representing almost 1,500 companies in Scotland. 

Overall the data by ACCA UK and The Corporate Finance Network reveals the impact of ongoing economic uncertainty upon Scottish SMEs, with few planning to hire new talent, or seek external finance to grow. 

Further findings include:

  • 1 in 4 Scottish businesses have still not returned to pre-Covid levels of productivity or turnover. 
  • Scottish SME Stagnation: only 15.5% are looking to hire new talent next year, while just over a tenth (11.8%) expect to make redundancies

However, Scottish SMEs show positive trends in comparison to UK average: 

  • 91% of Scottish business are expected to still be trading in 12 months’ time – nearly 10% higher than the UK average 
  • SMEs in Scotland were also the least likely to state they expected to require an overdraft facility, with just a quarter (25%) anticipating this, compared to 50% of those in Wales and 30% for the whole of the UK. 

Kirsty McGregor, founder at the CFN, said: ”Looking ahead, there are some major impacts coming in the new year, including business rates increases, an uplift in the national minimum wage, and the new health and social care levy introduction in April adding up to 2.5% to payroll costs, all of which will have a further negative impact on these struggling SMEs.

“As we head into another period of increased Covid-19 restrictions, I am concerned about the future of the UK SME economy and call on the government to review their policies to provide longer-term support until this period of uncertainty is over.”



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