British sole traders and small businesses are battening down the hatches in preparation for a looming recession, exclusive research shared with City A.M. reveals.
Over three quarters of small firms are fretting over the UK economy steering into reverse, according to fintech firm iwoca.
Firms are scrambling to boost their cash reserves to help weather the economic downturn. Nearly half of business loan brokers have filed more applications for credit for their clients, the research found.
Steven Scoufarides, head of broker channel at iwoca , said: “The current economic outlook for small businesses is precarious – we are seeing signs of an increasing number of SMEs searching for finance solutions to manage their cash flow and brace for the potential of a recession.”
Higher loan demand can be sign of businesses struggling to cover their fixed costs due to a reduction in revenue caused by shrinking demand.
The UK economy has been plunged into a slump by inflation surging much higher than expected at the beginning of the year. Prices are up 9.4 per cent, the quickest acceleration since 1982, spiking households and businesses.
Output unexpectedly jumped in May by 0.5 per cent, while purchasing managers’ indexes have indicated the UK economy is healthier than the US and eurozone.
Separate research published by insurance broker Gallagher found over one in 10 are worried a reduction in cash flow will knock their bottom line.