Small and medium-sized enterprises (SMEs) face ongoing financial pressures as rising prices and the high cost of living continue to take their toll, research from Shawbrook found.
Nearly eight in 10 (78%) SME decision makers said they were worried about inflation and the cost of living, up from 69% in 2024.
Rising business costs concerned three quarters (76%) of those surveyed, while three quarters (75%) listed economic uncertainty as a key worry.
The cost of borrowing was another concern, with more than two thirds (67%) saying they were worried about interest rates and over a quarter (27%) saying they were very concerned.
Additionally, more than half (56%) said they were worried about securing the right funding, while larger businesses were more likely to seek funding over the next year, with a quarter (26%) planning to apply for loans.
However, less than a fifth (19%) of SMEs overall said they planned to apply for a loan or new line of funding.
There was also a reluctance to take on debt, despite managing costs being the top priority for nearly half (47%) of SMEs.
Neil Rudge, chief banking officer, commercial at Shawbrook, said: “After a challenging few years, SMEs still face significant pressure as outgoings continue to rise.
“With inflation projected to increase again later in 2025 and additional costs like the upcoming NIC increase on the horizon, managing cash flow will be crucial.
“Finance can play a key role in helping businesses navigate these pressures.”
Rudge added: “However, there’s optimism – three-quarters of SME owners remain confident about their business prospects.
“For those in a position to pursue growth, working with a finance partner who understands the unique challenges and who can provide flexible solutions can make a real difference in staying resilient through uncertain times.
“But many business owners may not realise the range of options available to them.”
He said: “Specialist banks go beyond the standard offerings, taking the time to understand each business’s unique needs and challenges.
“With tailored solutions and a more personal approach, the support can be more flexible and responsive than traditional financial institutions.”
