The report for the Q4 2021 results, published last week, provides insight into SME perspectives and borrowing behaviour after almost two years of pandemic-related challenges. The report demonstrates that concerns over the lasting impact of the pandemic have begun to improve in many sectors, with some of the overall impact starting to wane. The proportion of SMEs seeing the pandemic as a major barrier to their business has decreased by 34 per cent since its peak in Q2 2020.
While overall the pandemic was still seen as the top barrier to running a business, this has now also
been joined by cost pressures and supply chain issues including skills shortages. These rising concerns are now likely to be exacerbated as we move further into 2022, as we see how the impacts of the Ukraine crisis on supply chains and costs are felt by businesses globally. The results also
demonstrated a growing minority concerned about EU trading arrangements among international
traders, increasing from 22 per cent in Q1 to 34 per cent in Q4.
On the positive side, there was evidence that many SMEs were able to look to the future. A majority (57 per cent) were looking to pursue some sort of activity related to growth, with the top intended action encouragingly being to seek to reduce carbon footprint. In terms of plans to borrow, there did remain a minority of 14 per cent saying they would be seekers of finance if not for concerns about the economy and their own business performance, though reassuringly only one per cent of those had been directly discouraged by a lender.
It would be wrong to say that in Q4 2021 the pandemic did not still pose a significant challenge to SMEs. However, there are certainly signs the landscape is changing, as we see a growing number of businesses start to see how they can move past the impacts of Covid-19 and look to build their future success despite broader economic headwinds. The extent to which this will be impacted by the global impact of recent geopolitical events as well as inflationary pressures remains to be seen.
