By Mike Randall, below, CEO, Simply Asset Finance
It’s widely acknowledged that SMEs are the backbone of the British economy, providing an abundance of jobs and opportunities and significantly contributing to turnover in the UK private sector. In recent years, however, economic events such as the financial crisis and the pandemic have put a strain on all businesses across the UK, subsequently impacting their resilience and productivity.
Remaining optimistic and having the tools to be resilient is key to success in every business. In fact, recent research found that business confidence had risen to a 13-month high. Those that can remain confident are more likely to embrace change, inspire their teams and find innovative solutions to roadblocks.
When assessing what has impacted SMEs of late, it comes largely down to productivity issues, economic volatility and of course, Covid. The Covid-19 pandemic left behind a trail of challenges such as supply chain disruptions and financial stress. The pandemic’s impact also magnified an acute skills shortage, particularly because 77% of UK adults between the ages of 50-70 who left or lost their jobs due to the pandemic, did not return to work. As businesses swiftly rebounded, the demand for skilled and experienced workers outpaced the number of available employees, resulting in gaps in the job market.
In response to these challenges, SMEs have learnt to adapt and harden their shells, employing smart strategies to survive amidst these hurdles. One key aspect of their adaptation has been investing in digital technology to expand market reach and simplify processes. In addition, through developing more agile production lines, businesses have been able to meet demands faster and adapt to issues in supply chains.
However, despite these forward-thinking tactics from business leaders, it is important to look at what we, as lenders, can do to ensure that businesses remain optimistic. Our support is crucial in empowering SMEs to forge ahead during challenging times. One way this can be done is by changing the way businesses can access financing. Employing a method that blends advanced technology and expert people-led consultancy means that companies are getting the right financing for their needs but also being assessed beyond the balance sheet. Therefore, getting the best solution.
By removing paper-based application processes, businesses can see faster approvals and a more simplified digital process, minimising errors and alleviating stress. Technology in this process plays a critical role. Using advanced analytics, lenders can consider a wider variety of factors when evaluating loan applications, allowing more considered and accurate decisions. This in turn fosters transparency, as lenders can easily explain their decisions to customers.
While technology is essential, this must be combined with personal relationships. Lenders must make an effort to understand businesses in the round, looking at the unique circumstances and goals of each business. To achieve this, lenders must build a talent pool of employees with diverse skillsets and insight across various fields, therefore cultivating this experience to offer SMEs the best support possible.
Ultimately, optimism has remained high because business leaders have shown resilience through tenacity, innovation and adoption of new methods to reach their business goals. However, SMEs should not be expected to face these challenges alone. Lenders have a responsibility to provide consistent, personal and expert support through the good times, and the bad. SMEs represent huge growth in the economy: they keep the economy moving, provide job opportunities and have a proven track record of being resilient against economic hardship. Lenders should recognise their potential and prioritise them as worthy investment opportunities. Through in-person meetings, technology and simplification of the application process, businesses can remain confident that they are being supported by lenders who understand their business and recognise their aspirations.