And nearly one third of businesses accessed grant funding last year, compared to just 2 per cent in 2019.
Only one in five (21 per cent) were expecting to grow, compared with 28 per cent the previous year.
SMEs in business services (25 per cent) and production (23 per cent) sectors were most optimistic about their prospects for growth over the next year, with businesses in construction and other services sectors least optimistic (both 17 per cent).
Encouragingly, small businesses have amassed a war chest due to the scale of Government support and reduced operating expenses. Deposit holdings have risen by 20 per cent to a record £252bn since the start of the pandemic.
Pivoting towards growth
This year’s Small Business Finance Markets survey suggests funding demand throughout 2021 will remain strong, as businesses seek to move on from the pandemic and pivot towards growth, adapt to life outside the EU, improve productivity and transition to a new net-zero economy.
Many of those businesses are in the hardest-hit sectors, including events, travel and those in the night-time economy, which took out loans last summer “in the hope that we’d be out of the woods by Christmas”.
Cherry reiterated that more than half of those with Covid-19 facilities say a student loan approach – whereby repayments are only made once a firm is profitable again – would be a helpful way forward.
Recovery Loan Scheme up to £10m will replace CBILS and BBLS