Half of small businesses looking to secure finance to grow their businesses in 2023
More than half of small businesses are looking to use finance to achieve growth in the coming year (53%) finds new research from Novuna Business Finance. This is up from 49% this time last year, with hiring new staff found to be the activity most likely to be reliant on finance (28%).
As we step into the New Year, a time where businesses plan and forecast for the year ahead, Novuna asked a poll of over 1,000 small business owners and senior decision makers which activities would not be able to continue should they be unable to secure finance. The results illustrated the importance of the small business community having access to finance, particularly at a time where many businesses are looking to expand and recover following a tricky winter period.
As the business hub of the UK, it is interesting to see London as the region most in need of finance in order to achieve their growth plans (59%), along with businesses optimistic about growth prospects (65% that predict significant growth).
Nationally, in which areas did the small business community say funding was most important?
- Hiring staff – Looking at the specific areas that were most reliant on securing funding, increasing headcount was the most common. The number of small businesses planning to use funding to increase headcount reached a seven-year high (28%).
- Offering new products and services – Just over a quarter (25%) said they would be relying on funding to create new products and service lines. This rose most among the retail (30%) and hospitality (35%) sectors.
- Modernizing IT capabilities – The research found that proactive steps to further modernize and innovate businesses was also a priority, with a quarter of small businesses looking to secure funding to modernize their tech (24%). This was most prominent in advertising (33%) and retail (29%). With technology moving at a faster rate than ever before, it is essential for companies to keep up with these changes in order to stay ahead, and this further illustrates the importance of funding.
- Marketing and advertising – Around a fifth (21%) of businesses said they would be looking for funding to launch an advertising campaign in the coming year. This rose most in the hospitality (31%) and retail (24%) sectors.
Jo Morris, Head of Insight at Novuna Business Finance commented: “2022 has been a tough year for everyone in the business world, with small businesses in particular having to navigate a variety of obstacles. It is encouraging, however, to see growth outlook for the small business community maintaining a steady level throughout the year, with many looking to continue this expansion and growth into 2023. With this comes an increased need for finance in order for companies to be able to achieve their growth forecasts – and, this research has made it quite apparent how important funding is when trying to expand and grow.
“At Novuna Business Finance, we are serious about championing each sector. With an asset portfolio of more than £1.4bn, our simple and competitive funding is designed to fit around the needs of small businesses, supporting customers to buy or lease business assets. With an expert team and award-winning services, we can provide access to the finance solution our customers need, helping them to develop and grow.”
Activities in 2023 small businesses are planning that require funding
- Increase headcount/ hire new people 28%
- Launch new products/ services 25%
- Modernize IT capability/ purchase new IT equipment 24%
- Run a marketing/ advertising campaign 21%
- Move to a better location/ bigger space 20%
- Invest in new vehicles 19%
- Pay our tax bills 18%
- Invest in new production lines/ machinery 18%
- Launch into new markets outside the UK 18%
- Launch into new market segments within the UK 17%
- Invest in a new company brand/ website 17%
- Pitch for major accounts/ compete with larger competitors 17%
- Pay suppliers on time 16%
- Invest in staff training programmes 16%
- Other 10%
- Fully adapt the business to new data protection laws (i.e. put compliance systems in place) 8%