Insights from 1,000 UK Small Businesses
This report presents the findings of a survey conducted by Tex Capital involving 1,000 UK small businesses.
This report presents the findings of a survey conducted by Tex Capital involving 1,000 UK small businesses. The purpose of this research was to understand the funding needs, challenges, and outlook of SMEs operating in a complex economic landscape. The results reveal that repayment terms, speed of accessing funds, and the total amount offered are the top funding priorities. Meanwhile, small businesses face significant risks such as rising operational costs, potential recessionary pressures, and higher interest rates. The report offers a detailed analysis of these trends alongside recommendations for funders, policymakers, and businesses themselves.
Tex Capital designed and distributed a structured survey questionnaire to 1,000 SMEs across different sectors in the UK. Respondents provided insights on funding preferences, perceived importance of finance, operational risks, and business outlook. Responses were collected and aggregated to ensure confidentiality while enabling statistical analysis. The survey design focused on extracting both quantitative data (number of responses) and qualitative insights (relative importance). The analysis presented in this report includes visual representations of data to better understand the distribution of responses.
When assessing funding offers, SMEs highlighted several key factors that shape their decision-making. The repayment term emerged as the most important factor, followed by the speed of fund disbursement, and the amount of funding available. Interest rates and fees, although important, were not ranked as highly. This underscores that while cost of capital matters, flexibility and liquidity are more pressing concerns for many small firms. The findings suggest that lenders and funders should adapt their offerings to emphasize convenience and customization.
Figure 1: Funding priorities as ranked by SMEs.
Perceived Importance of Funding
Respondents were also asked how important external funding is to their business operations. While a significant proportion indicated that funding was 'Somewhat Important' or 'Very Important,' a smaller group considered it 'Not Important.' This variation reflects the diverse nature of SMEs. For some, internal cash flow or retained earnings may provide sufficient liquidity, while others depend heavily on external financing for growth and survival. Understanding this spectrum helps funders better segment their target audience and tailor financial products accordingly.
The survey uncovered a series of pressing challenges faced by SMEs. The most prominent concern is the rise in running costs, with energy prices, supply chain disruptions, and inflationary pressures cited as primary contributors. Recessionary fears were also notable, reflecting the broader macroeconomic uncertainty. Higher interest rates, meanwhile, have a dual impact: increasing the cost of borrowing and constraining consumer demand. Alarmingly, a subset of businesses reported concerns about having to close entirely, highlighting the vulnerability of SMEs in volatile environments.
Figure 2: Key risks as identified by SMEs.
Access to Credit
When asked about their experiences applying for funding, businesses revealed a complex picture. Some had successfully applied, others had not, and a meaningful number indicated that they had 'not applied' at all. This last category is particularly important, as it raises questions about why SMEs refrain from seeking funding. Possible explanations include lack of awareness about available products, concerns about rejection, or apprehension regarding the application process. Funders can address these barriers by improving transparency, streamlining application processes, and offering advisory support.
Business Outlook
SMEs were asked to assess their confidence regarding the future. Responses varied significantly, with some stating 'Definitely' or 'Yes' when asked if they felt optimistic, while others responded 'No' or 'Absolutely Not.' This uneven sentiment highlights the heterogeneity of the SME sector. Industry, region, and size of business all likely influence outlook. For example, firms in technology or professional services may express greater optimism compared to those in retail or hospitality, which face more immediate cost pressures.
Figure 3: Confidence levels of UK SMEs about their business outlook.