Despite current substantial ongoing difficulties, this year is also expected to bring fresh corporate growth chances. In fact, according to recent data over 80% of businesses said they want to acquire additional funding in 2023. Learn how other industries want to use their cash this year and how you can obtain business finance to support your goals.
What are businesses using their funds for?
15% of UK SMEs seeking business funding in 2023 intend to use it to finance expansion, 13% to invest in new equipment or facilities, and 11% to buy more inventory and stock for their company. The top reasons for taking out finance are listed below by industry.
Employees' salaries in architecture, engineering and construction
Salaries in the arts and culture sector
Inventory and stock in education
Ground and expansion in finance
Inventory and stock related to healthcare
Expansion in retail
Lowering the carbon impact of travel and transportation
Why is staff retention being impacted by increasing cost concerns?
The desire for expansion is encouraging given the rising number of layoffs plaguing the corporate environment. Technology industry layoffs continue to make news; just a few of the world's leading companies have disclosed workforce reductions so far this year: Spotify, Twitter, Amazon, IBM and Sales Force.
Recent data reveals that employee salaries are a key area of focus across numerous industries, the data also demonstrate that increased job insecurity is being caused by a variety of cost pressures, including the weak performance of the pound, rising energy prices, increasing interest rates and many other cost pressures.
More than 1,000k companies responded to a survey and results showed that SMEs are considering layoffs this year. Only 27% of respondents indicated layoffs are "not likely" over the first two quarters of 2023, while over 7o% said it is likely that their business will have to do so over the next 6 months. A closer look at the statistics reveals that the financial industry is the most severely affected, with almost 90% of financial firms likely to consider layoffs. When asked about the likelihood of staff redundancies a number of different industries scored highly, including the following:
Manufacturing & Utilities
Sales, Media & Marketing
Retail, Catering & Leisure
IT & Telecoms
Why do SMEs have trouble retaining staff?
Widespread cost concerns are causing UK SMEs to think about making employee reductions in the near future, and only 0.5% of poll responders believe that cases will not increase significantly over the next six months. The top eight cost pressures that business owners must deal with are as follows:
A hike in Supplier Pricing
Performance of Pound/ Sterling
An increase in National Living Wage and National Insurance, are just two examples of rising costs of labour.
The performance of the pound was cited by 36% of responders in the retail & leisure industries as the biggest cost constraint, followed by supplier and energy prices (25%) Even huge stores have stopped growth plans due to energy prices, making it more expensive for merchants to import goods from abroad due to the weak pound.
Funding for staff retention and growth
Despite the general widespread fear around budget cost and layoffs, businesses are making every effort they can to curb the impact. 35% of the businesses that received additional money in 2022 did so to finance employee recruitment and retention. It was nearly as crucial as "investing in growth" which was where 40% of SMEs invested their business financing. It is obvious that even if firms are having trouble retaining employees, they must do so in order to continue doing business and expanding with confidence.
If you want to secure finance for your business over the next few months, whether it's for growth or staff retention, you are in the right place.
From Short-Term to Long Term Unsecured Loans, you can explore a range of different funding types through us. Including:
Short Term Unsecured Loans - term of 12 months or under
Long-Term Unsecured Loans - term of 12-72 months
Merchant Cash Advances
With over thirty lenders and specialist leasing companies on our broker panel, we can bring our experience to bear in matching you to the funder most suited to your needs. This way, we can always ensure that you get the best deal. For over twenty-five years, GSM Finance has helped businesses across a range of sectors to fulfil their growth aims with our individually tailored asset finance packages. Our specialised brokers will take the hassle out of your hands; finding you cost-efficient options that keep the money in your pocket, without compromising quality.
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