Optimism as small businesses in Wales start to get back to normal but financial support lagging behind

Small business owners in Wales are feeling upbeat about the prospect of trading getting back to normal but are still struggling with their mental health and finding financial support, according to a survey from ACCA UK (the Association of Chartered Certified Accountants) and The Corporate Finance Network (CFN).

All owners reported that business trading is at the level they expected or slightly higher this month, a jump of 11% over last month.

And there was also unanimity from 100% of respondents that their businesses will return to pre- Covid levels of productivity and turnover within two years, with more than half (57%) believing they will achieve that goal within 12 months.

The SME Tracker, which reports what small businesses tell their accountants, reported data from accountants representing 10,900 SME clients in Wales and ran until yesterday.

However, despite the optimism, about their own prospects, business owners continued to report on the struggle to find suitable financial backing from traditional outlets now that government-backed loans are winding down.

More than half (57%) said they found it more difficult to obtain even an overdraft and the same percentage struggled to obtain an unsecured business loan. Others also had problems qualifying for a commercial mortgage (43%), which was a 10% increase from last month.

Anecdotally, some members even told the survey that even the most straightforward tasks, including opening bank accounts, have been made more difficult.

This frustration with the real-world practicalities of delivering on the opportunities now re-emerging may have contributed to another worrying set of responses concerning business owners’ wellbeing.

More than one in five (22%) said they were more stressed and anxious and 19% reported that they were either not sleeping, feeling unable to cope or that their mental health had deteriorated.

Lloyd Powell, Head of ACCA Wales, said: “Our survey shows business owners are still struggling to secure the right financial support.

“They are telling us that conventional and traditional sources of business finance, such as banks, are lagging behind and are making it difficult for them to complete even the most basic functions like opening bank accounts and securing an overdraft.

“We would like to see government working with finance providers to improve access to the right finance options to help to support recovery and we will be engaging with both parties on this matter.”

Kirsty McGregor, founder of the Corporate Finance Network, said: “Small business owners can see the opportunity on the horizon and are seeing the early signs that trading can return to normal. However, they are also feeling uncertain about navigating the current financial landscape, which is causing them stress.

“They are generally optimistic about the future, but they perceive a high degree of risk and uncertainty stands between them and achieving their targets.”