· 52% of small businesses will ditch growth plans if they are unable to secure funding
· More than a third would put on hold plans to create jobs locally
· Investment in new machinery and vehicles also at risk
The nationwide poll of 1,242 small business owners revealed that 52% of the region’s business owners in the region said they would have to put one or more growth projects on hold in the coming months if they were unable to secure funding or finance to power their growth plans –well above the national average (42%). Across Yorkshire and Humberside, 36% of business owners said plans to increase headcount and create new jobs would be put on hold. Plans to invest in new vehicles, modernising machinery and plans to expand to overseas markets would also be shelved.
The growth initiatives Yorkshire/ Humberside small businesses are most likely to put on hold if they were unable to secure funding
| Increase headcount/ hire new people | 36% |
| Run a marketing/advertising campaign | 26% |
| Invest in new vehicles | 25% |
| Launch into new markets outside the UK | 23% |
| Launch new products/ services | 20% |
| Invest in new production lines/ machinery | 21% |
| Modernise IT capability/purchase new IT equipment | 10% |
This reliance on finance comes at a time when the ripple effect of geo-political disruption is making it harder for small business owners to forecast organic growth. Nationally, the percentage of UK small business owners predicting growth for the three months to the end of June has fallen to a four-year low (29%) – with significant falls in the manufacturing, construction and retail sectors.
The Novuna Business Finance research also dashes any assumption that access to finance is the preserve of business start-ups. Rather, the Novuna data suggests that established and successful businesses were those most in need of funding to turbo-charge existing growth plans. For example, enterprises that predicted significant expansion over the next three months were far more likely to need funding to power growth than those enterprises trying to overturn contraction (90% Vs 57%). Also, established small businesses with a turnover of £1-10 Million were more likely to need finance than start-ups with a turnover of less than a £1 Million (66% VS 55%).
Joanna Morris, Head of Insight at Novuna Business Finance commented: “As we all reflect on the economic growth agenda that the Government has committed itself to, our research makes clear the immediate and tangible impact of businesses not securing funding – job creation put on hold, and investment in new machinery and vehicles also cancelled. All this directly contributes to the economic growth the country at large needs to see – and this is why supporting small businesses in the region at this critical time is so important.
“At Novuna Business Finance, we specialise in supporting established small businesses as an alternative to the high street banks. We offer small businesses in need of capital the ability to finance assets, an alternative that could potentially benefit their overall cash flow and ease pressure on other areas of their budget. With an expert team and award-winning services, we provide access to the financial solutions our customers need and are committed to helping them develop and grow.”