It is well documented how the cost of living crisis has impacted businesses in the UK, with unprecedented rises in the price of goods, paired with a significant drop in consumer spending.
No doubt, this has hammered the bottom line of thousands of small businesses. But what effect does this have on mental health?
Recent research by HSBC UK reveals how the mental health of small business owners has suffered due to ongoing economic challenges, with 26% of respondents remarking that they have experienced a decline in their general wellbeing.
Financial Support for Small Businesses in the UK
Despite declining revenues and rising costs, over two thirds of respondents have not approached their banks to help address their business’s financial situation. This is indicative of a larger issue at hand in the UK, in which small businesses often feel abandoned by their banks, with many traditional financial institutions unwilling and unable to offer the type of support needed by small business owners.
Although larger businesses typically find joy in accessing funding from banks and traditional lenders, small businesses can struggle to find sufficient financial support when they need it most.
Inconsistent cash flow can hamper the ability of small business owners to consistently make payroll for employees, settle invoices for suppliers, purchase inventory and an array of other business needs.
Many of these owners run healthy, successful companies, yet nonetheless experience cash flow fluctuations that are typical for small businesses.
Banks and traditional lenders are slow moving beasts when it comes to small business financing, requiring in-depth business plans, personal guarantees and collateral. Moreover, funding is slow to be approved and issued, with lag-times of three months as standard.
With this considered, it is no surprise that the research shows that 29% of business owners have used their personal savings to support their businesses.
Peter McIntyre, Head of Business Banking of HSBC UK, remarked that “with the current economic environment creating business uncertainty, it’s fair to say that many small companies have had a rough ride these last few months”.
He continued: “Owners are at the helm, so it’s no surprise that navigating cost challenges is having an impact on their own personal well-being.”
Small businesses access unsecured, fast funding from Got Capital. As an alternative lender, Got Capital offers financing solutions specifically designed for and catered to the needs of SMEs.
