Cash flow identified as SMEs top challenge

8th November 2023

SME business owners have revealed that cash flow is the biggest challenge for nearly half of the respondents.

Almost half (48%) of small to medium enterprises cited cashflow as the largest single challenge their business was facing, according to research by Millbrook Business Finance. This was followed by the cost-of-living crisis (32%) and energy prices (30%).

The firm surveyed its database of SME owners and directors in October 2023 to establish the leading pain points for businesses.

Other issues businesses were facing included supply chain disruption (26%), inflation (24%), recruitment (20%), building overheads (15%) and unexpected tax bills (8%).

For those planning on taking out finance in the next 12 months, the most prominent reason was to smooth out issues with cashflow (40%), followed by buying machinery and equipment and releasing equity (20%).

Justin Amos, Managing Director of Millbrook Business Finance, said “It comes as no surprise that so many businesses are struggling with cash flow at the present time. Whenever the economy is weakened, late payments and supressed customer demand become much more commonplace, and this can dramatically worsen cash flow for SMEs.”

“When you also factor in the ongoing cost of living crisis and painfully high energy costs then it’s no wonder businesses are facing significant financial challenges.”