Government accused of ignoring SMEs as firms fight for survival
Three in five small business owners feel ignored by the government, according to a fresh survey, an increasing amount firms raise the alarm on their fight to stay afloat.
Small and medium-sized enterprises (SMEs) are calling on Westminster to take further measures to support businesses after 57 per cent fear for their survival in the next year – a jump from 50 per cent last year.
The concerns, revealed in Virgin Startup’s latest Founder Barometer report, come amid rising economic pressures for businesses across the UK.
The cost-of-living crisis was named as the top challenge for SMEs at 33 per cent, but this eased from 52 per cent the previous year. Meanwhile, one in five sounded concerns on tax rates.
The rising costs of employment and high taxes debuted in Chancellor Rachel Reeves Autumn Budget have put SMEs under renewed pressure.
The Federation of Small Businesses (FSB) highlighted earlier this year the hike to the national minimum wage and sweeping changes to worker’s rights could wreak havoc on smaller firms and laid to them trimming headcounts.
SMEs lacking finance access
Access to finance was listed as another key concern by one in five founders.
Over 60 per cent said they required greater support in accessing capital, which reflect troubles firms have had with high street lenders.
Top bank bosses were summoned for talks with the Treasury earlier this year after a damning report from the Department of Business and Trade revealed overall loan success rates for firms applying for bank finance was below 50 per cent – down from an approval rate of 67 per cent in 2018.
Fintechs have since swooped in to fill this void, with the rise of Allica and OakNorth – specialist neobanks specifically catering to SME lending.
But traditional lenders have slowly edged back into their space, with 2025’s first-quarter SME lending hitting the highest level since 2022.
The British Business Bank – a government-owned vehicle to improve access to smaller businesses – received a £6.6bn injection as part of the UK government’s industrial strategy.
Andy Fishburn, Managing Director at Virgin StartUp said: “Small business founders are the backbone of the UK economy, yet the research highlights a large proportion are feeling under pressure in the current economic climate, and it’s concerning that so many are feeling overlooked by those who serve them.
“Despite the challenges many face, we’re encouraged to see founders remain resilient, as they focus on growth, sustainability and innovation.”