Home Over 40% Of Established SMEs in the UK Fear Insolvency as the Country Heads for Recession
Over 40% Of Established SMEs in the UK Fear Insolvency as the Country Heads for Recession

Over 40% Of Established SMEs in the UK Fear Insolvency as the Country Heads for Recession

  • Published: 16th November 2022

Small and Medium-sized enterprises (SMEs) are a vital part of the UK economy. However, over recent months, there has been an increase in concern amongst business owners that they may not be able to weather the looming economic storm. According to MoneyTransfers.com, two in five established businesses are worried about insolvency due to the impending recession.

MoneyTransfers CEO Jonathan Merry commented on the data,

Many businesses have been holding on by their fingernails during the pandemic, hoping for a return to normality. However, with the UK now heading into a recession, it seems that those hopes are fading fast. Businesses can take some simple steps to insulate themselves from the worst of the economic downturn. For example, proactively managing cash flow and reviewing their outgoings.

MoneyTransfers CEO Jonathan Merry

UK Economy Hinting at an Oncoming Recession

The UK economy went down by 0.2% from July to September, and experts are cautioning that the nation is on track for its longest recession yet. With many businesses already feeling the squeeze, it is clear that the next few months are going to be very tough for SMEs up and down the country.

Many households are spending less as they worry about the future, which is starting to impact businesses. If people are cutting back on their spending, then it is only a matter of time before this starts to hit companies’ bottom lines.

Surviving the Storm

With the economic outlook remaining uncertain, SMEs must take steps to protect themselves from the potential fallout of a recession. Reviewing finances, exploring funding options, and seeking professional advice are all key steps that can help businesses survive.

In order to help small businesses, banks and lenders must do more to support them through this difficult period. This includes providing access to finance, offering advice and guidance, and working with businesses to ensure they are best placed to get through the economic concerns.

By taking action now, businesses can give themselves the best possible chance of weathering the economic storm and coming out the other side stronger than ever.

Elizabeth
Written by
Elizabeth

Elizabeth is a financial journalist working in global markets across the world. Specialisms include personal finance and property.