Like the GDP figures, Q3 was somewhat better for SMEs than Q2, but challenges remain – the SME Finance Monitor provides an update

By Shiona Davies

Having published our SME Finance Monitor data for Q2 in early August, it was just too long to wait for the next scheduled publication after Q4 was completed, so I am delighted to be able to share extra data, to the end of Q3, available from today on our website as a chart pack and also a management summary: https://www.bva-bdrc.com/products/sme-finance-monitor/

Last time, data for Q2 2020 reflected the significant impact of Covid 19 on SMEs with fewer planning to grow, 6 in 10 thinking they would be looking at either much reduced turnover, or none at all, for the next few months and half seeing the economic climate as a major barrier to their business.

The latest data for Q3 2020 (July-September) was gathered just as the R number started to increase and a curfew was introduced but before Tiers and lockdowns:

  • The strains still exist - Covid has impacted on growth and growth prospects and more SMEs see threats (32%) than opportunities  (19%) ahead, with Covid hitting some sectors, such as Hospitality, very hard.
  • Overall though, metrics are typically not worsening and in some instances the situation has improved from Q2, including the proportion of SMEs expecting income to be reduced by 50%+ or non-existent, which has halved from 60% in Q2 to 30% in Q3.
  • From a funding perspective, a quarter of SMEs have applied for, or are considering, Covid related funding, primarily one of the Government backed loan schemes, and 9 in 10 of those who applied were successful. Use of any external finance is now back to its previous levels  (40%), a stable 29% hold £10,000 or more of credit balances and there have also been more injections of personal funds (now 38%) as more SMEs felt that these injections “had to” be made (23%).

We continue to review the data on a regular basis and 3 month rolling data to the end of October will be available shortly on our website, with the next full report after fieldwork is completed for Q4.

To find out more, please get in touch here.

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