A quarter of UK-based small- and medium-sized enterprises (SMEs) have paused investment in innovation and growth in order to survive the cost of living crisis.
However, almost half (46 per cent) of UK businesses expect their turnover to increase by this time next year, while 22 per cent expect a decrease.
According to a new survey from Nucleus Commercial Finance, just 13 per cent of SMEs have not yet had to make any drastic changes to their business operations. 39 per cent told Nucleus that they have had to increase their prices to make sure they can keep their heads above water.
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In an effort to cut costs, 20 per cent of SMEs said that they have paused digital and IT investment. 19 per cent said that they have instigated a hiring freeze, and 19 per cent have moved to a smaller office. Around one in seven (15 per cent) said that they have taken the decision to reduce the products and services that they offer.
“Agility and innovation are both crucial for a dynamic SME sector and it’s hugely worrying that businesses across the UK are having to actively hamper their future growth potential,” said Chirag Shah, founder and chief executive of Nucleus Commercial Finance.
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“As the UK trundles through the economic quagmire, it’s going to need its SME operating at their energetic best in order to drag it out the other side.
“Having made some tough decisions about cutting their cloth to see them through such a challenging period, it only heightens the importance of the commercial financial pipeline. It is essential that businesses have ready access to lending so that they are able to seize growth opportunities as they pop up.”
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