iwoca’s data shows that the percentage of brokers reporting pessimism among their SME clients about the future has more than doubled, rising from 15% last quarter to 34%.
Meanwhile, only one-in-three (36%) brokers said that SMEs felt optimistic, down from 56% in the previous index.
According to the report, nearly half of brokers (47%) said SMEs were worried about a possible recession, up from 35%, reversing a year-long trend of decreasing concerns.
SMEs are shifting focus from growth to survival, iwoca highlighted.
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Managing cash flow is now the top reason for loan applications, cited by 61% of brokers—up from 49% a year ago.
In contrast, only 36% of brokers said their SME clients were seeking loans to drive growth, the lowest proportion since Q3 2023.
Colin Goldstein, CCO for the UK at iwoca (pictured above), commented: “Rising pessimism and fears of a recession are reshaping SME mindsets, with a greater focus on survival over growth.
“We’ve seen a surge in demand for larger loans from businesses looking for extra financial stability in uncertain times.”
High-value loans are becoming increasingly important, with 15% of brokers expecting growth in loan applications above £200,000.
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