· 58% of small businesses will ditch growth plans if they are unable to secure funding
· Direct impact this summer on job creation and new trade deals abroad
· Fastest growing business success stories most in need of finance to power growth
· Need for finance up year-on-year across 11 of 12 industry sectors
The percentage of UK small businesses that rely on finance or funding in order to invest in business growth has reached an eight year high – and those most in need of it are the enterprises predicting significant expansion for the months ahead – according to new research by Novuna Business Finance.
The nationwide poll of 1,242 small business owners revealed that 58% of business owners 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. 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.
Percentage of small businesses that say they would put growth projects on hold – if they were unable to secure funding
|
Q4 2017 |
Q2 2018 |
Q2 2020 |
Q2 2021 |
Q2 2022 |
Q2 2023 |
Q2 2024 |
Q2 2025 |
|
52% |
49% |
56% |
53% |
55% |
53% |
53% |
58% |
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 in order 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%).
At a time when the Government has backed a growth agenda for the fragile UK economy, the Novuna data suggests the projects small businesses will drop if they are unable to secure funding are the very initiatives that would support the economy at large – job creation, expansion into new overseas markets and launching new products and services.
The growth initiatives small businesses are most likely to put on hold if they were unable to secure funding
|
Increase headcount/ hire new people |
31% |
|
Launch new products/ services |
25% |
|
Run a marketing/advertising campaign |
24% |
|
Launch into new markets outside the UK |
20% |
|
Modernise IT capability/purchase new IT equipment |
20% |
|
Invest in new production lines/ machinery |
19% |
|
Invest in new vehicles |
17% |
Sector highlights
Whilst the need for finance peaked in IT/ telecoms (70%) and the media/marketing sectors (65%), across all but one industry sectors there was a year-on-year rise in the percentage of small businesses needing to secure funding to power one of more growth initiatives.
|
|
Q2 2024 |
Q2 2025 |
|
IT & telecoms |
51% |
70% |
|
Media and marketing |
61% |
65% |
|
Real estate |
46% |
63% |
|
Hospitality & leisure |
56% |
63% |
|
Manufacturing |
59% |
62% |
|
Retail |
47% |
61% |
|
Transport & distribution |
56% |
60% |
|
Agriculture |
63% |
59% |
|
Legal |
51% |
56% |
|
Construction |
53% |
54% |
|
Medical services |
49% |
51% |
|
Finance & accounting |
41% |
46% |
Regional Round-up
Around the UK, there was a year-on-year increase in the percentage of small businesses reliant on funding to power growth in six UK regions. The need for finance was strongest in the regions that are home to England’s three biggest cities – London (75%), The North West (65%) and West Midlands (62%).
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 two things very clear: First, access to finance is a key requirement of our most successful and most established small businesses; funding is not a plaster to prop-up a struggling business, it’s the catalyst needed to help fast growing businesses to realise their full potential. Second, our research makes clear the immediate and tangible impact of businesses not securing funding – job creation put on hold, product innovation delayed and plans to forge trade details abroad cancelled. All this directly contributes to the economic growth the country at large needs to see – and this is why supporting small businesses 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.”