The UK’s economic climate is proving a challenge for businesses of all sizes, but none more so than Small and Medium Enterprises (SMEs).
The current climate is proving a challenge for SMEs, with many reluctant to invest in their company for fear of putting their business at risk for a financial collapse.
The hesitation is understandable given the uncertainty around the economy, and we’ve looked at some of the reasons why and what you can do to potentially look at investment opportunities.
What are the factors behind the lack of investment from SMEs?
There is a willingness to invest from SMEs, as a recent survey conducted by Barclays Bank highlighted 53 per cent plan to increase investment in the next 12 months.
However, SMEs have the lowest loan application rate and, worryingly, from an economic perspective, the survey found that 80 per cent of SMEs did not borrow any cash to invest in the 12 months up to August 2025, with half of those thinking about investment but ultimately deciding against it.
SMEs are very much focusing on making immediate differences rather than long-term aspirations.
SME owners are enhancing the resources they already have, training their staff and focusing on marketing activities and product development.
How can businesses be investment ready?
Despite a reluctance from SMEs to invest in the current climate, you can look at growth opportunities and see if your company has the scope to invest. This is where understanding your company’s financial position helps.
This includes knowing your incomings and expenditures each month and annually. You will be looking at revenue, turnover and profit figures as well as operational and staff costs.
Gathering all financial information will help you decide if there is room for you to invest in the next stage of your company’s growth plan.
Making the right decision is essential, as you don’t want to risk the hard work you have already done to get your business where it is today. Your finances will decide if this is the right time to invest and if you have as much knowledge as possible, you can plan ahead effectively and look at investment in the future.
Working with an accountant will help you build a clear picture of your finances. They can help you obtain and look at all figures, look over long-term plans and spot potential opportunities.
Looking at investing in your company?
Investing in the next phase of growth is always exciting, but it’s important you know the finances involved and understand the current financial position of your company and this is where our team can help.
Our team will help you build a picture of your company’s finances, looking at all the important figures, and give you the tools to make the right investment decisions.
If you’re ready to invest in your company, get in touch with our team.