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Published 22 August 2022

A Third of SMEs Need to Access Business Finance to Survive

In the midst of the cost of living crisis, many small and medium enterprises may need to access business finance in order to survive. But how readily available is funding in 2022? NerdWallet conducted a survey to find out more.

As we crash from the pains of the Covid-19 pandemic into a landscape of rising energy costs, surging inflation and potential recession, many small and medium enterprises (SMEs) may find that they are beset with problems. You could call it the cost of running a business crisis.

In times of such difficulty, SMEs may need to turn to business finance for help – be it credit cards, business loans, or other forms of funding.

NerdWallet’s exclusive survey of 500 senior SME decision makers shows just how important business finance currently is. Shockingly, a third (33%) of respondents stated that accessing business finance will be vital to their survival in the next six months.

Just as worrying was the fact that 31% said that their organisation is not financially stable, while 32% claimed they had no financial plan in place to sustain operations in the next 12 months.

Clearly, the need for support is there. But how easy is it for SMEs to access business finance?

How hard is it to access business finance?

Despite the evident need for business finance, and the number of options available, SMEs are struggling to get access to funds.

Almost a third (31%) of the decision makers and managers of SMEs we surveyed, have applied for at least one form of business finance since the beginning of 2022.

Yet a fifth (20%) of those who did apply for business finance had their applications rejected since the start of the year, despite having a ‘good or excellent’ business credit score.

Unsurprisingly, 41% of SME decision makers also claimed that business finance is less accessible than it was 12 months ago.

» MORE: Why do businesses need finance?

What forms of business finance are available?

The increased inaccessibility of traditional forms of business finance has caused 30% of respondents to explore other methods of funding to finance their operations.

It is always important to properly get to grips with each form of finance, whether it is ‘traditional’ or ‘alternative’, in order to make sure you understand the specific risks that are attached to each product.

Business loans

The most familiar form of business finance is arguably the business loan. This is where you borrow a lump sum of money, and then pay it back, usually in monthly instalments, with interest on top.

It may also be possible to access government business loans, such as the recently extended Recovery Loan Scheme.

» MORE: How to apply for the Government Recovery Loan Scheme

Business credit cards

If you’re looking for a short-term form of finance, you could apply for a business credit card. You should be aware, however, that credit cards can come with high interest rates, so it is important you keep on top of your repayments.

» MORE: What are business credit cards?

Business overdraft

If you have a business bank account, you might be able to apply for an overdraft. This can give you flexibility if a payment is larger than expected and you do not have the full amount in your account.

As with all forms of business finance, it is important you keep up with your overdraft repayments in order to avoid excessive charges.

Asset financing

There are two main ways to use asset financing: to fund the purchase or leasing of a piece of equipment (hire purchase), or as a way to unlock the value of an asset you already own (asset refinance).

If you fail to keep up with your asset finance payments, you could lose access to a piece of equipment or machinery that is essential to the running of your business.

» MORE: What is asset finance?

Invoice financing

If your business regularly uses invoices, then invoice finance may be a funding option you could explore. It allows you to borrow a percentage of the value of your pending customer invoices, minus discount and service charges. The responsibility of chasing the invoices falls to either you or the lender, depending on whether you choose invoice discounting or factoring.

Merchant cash advance

If your business regularly takes customer debit and credit card payments, then you could access a merchant cash advance. With this form of lending, you borrow a sum of money, and then pay it back through a fixed percentage of your future customer card payments.

Business grants

You shouldn’t overlook the number of small business grants that might be available to your organisation – for free. These can be offered on a national, regional and local basis, and can often be targeted at specific groups.

» MORE: Business grants for women


NerdWallet commissioned market research agency Opinium to conduct an online survey of 500 decision makers and managers within SMEs in the UK between 8 and 15 June 2022.

Image source: Getty Images

About the Author

Connor Campbell

Connor is a lead writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and…

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