True State of Business Confidence and Costs Revealed for UK SMEs

• Survey data from Nucleus Commercial Finance found that SMEs’ business confidence averages just 40.1 on a 0-100 scale.
• Inflation is the most significant concern for 44% of SMEs, with rising operational costs impacting 40%
• 53% of businesses are increasing prices to mitigate rising overheads
• 79% of SMEs are letting workers work remotely to spend less money running their business
• This news comes as NCF gets another £200m from NatWest to give loans to UK SMEs

With high interest rates, resources costing more, and slow growth ahead, 2024 has been hard for UK businesses. New findings from Nucleus Commercial Finance show that SMEs aren’t feeling very sure about things, scoring just 40.1 out of 100.

When they asked 1500 SMEs, they found many things making owners worry. The biggest problems were inflation (44% were worried), higher running costs (40%), and cash flow (36%).

Other things that worried them were keeping workers (28%), finding new workers (24%), getting supplies (19%) and getting new tech (14%).

Since all these things make it cost more to run SMEs, owners are trying different ways to spend less. More than half (53%) of SMEs had no choice but to make their prices higher for customers. While almost a third (28%) of SMEs have turned to AI to reduce running costs, 21% have reduced their operating hours, and 16% have reduced the number of employees working for their business. A further 14% have reduced the range of products or services they offer customers.

When investigating how economic concerns impact operational performance for SMEs, NCF asked UK businesses whether they were still utilising remote working. The answer was a fairly even split, with 53% of SMEs continuing with a remote or hybrid workforce and 47% of businesses having returned to an office-based operational infrastructure. However, where a work-from-home strategy was still being implemented, 79% of SMEs admitted encouraging employees to continue working remotely to save their firm money in office and utility costs.

Chirag Shah, founder and CEO at Nucleus Commercial Finance, comments: ‘It’s no secret that the UK economy has been struggling since the pandemic, and for SMEs this has meant a range of concerns. From rising costs and difficulties securing funding to staff shortages and slow or floundering growth, it can be challenging to know how to address these issues.

‘But while there are clear economic, social, and environmental reasons behind many of the problems that SMEs are facing, some of them can be tackled through access to data and access to funding. With access to the right data, you can gain vital insights into your business for informed decision-making. At NCF, we provide SMEs with a free data-insights platform that provides real-time analysis and commentary on various important metrics, including turnover, gross margin and profit and loss. This can help across the board, from recruitment and employee retention to product development. We have also just announced a further £200m in funding from NatWest for business loans for UK SMEs.

Understanding what your customers want and how your business functions can help to ensure that your funds – and other resources – always go to where they can make the most significant positive impact. And while this is beneficial at any time, it becomes essential during economic stress.’

About Nucleus Commercial Finance:

Nucleus Commercial Finance (NCF), established in 2011, stands as a hallmark of innovative fintech lending in the UK, having channelled nearly £3 billion to a myriad of businesses, big and small, across diverse sectors.

With a funding suite ranging from £3k to £500k, Nucleus offers an assortment of alternative financial solutions, encompassing Nucleus Business Loans and Revenue-based Loans.

NCF combines the robustness of traditional bank financing with the agility, speed and convenience of modern alternative lending platforms. With cutting-edge technology and a friendly approach, Nucleus builds tailored financial solutions that are perfectly suited to meet the unique aspirations of every business it supports.