UK SMEs begin road to recovery, Barclaycard says

Barclaycard Payments’ second SME Barometer has reported that, despite UK businesses predicting poor short-term performance, and reporting a dip in sentiment compared to last quarter, there are early signs that they have begun the road to recovery.

The report found that business sentiment has dropped by 31 points this quarter, down to 79 points out of a possible 200, with any score below 100 indicating a negative sentiment.

This is paired with low expectations for business growth, with revenue predicted to fall by 28% in Q2 and contract by 5.1% over the next 12 months.

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 More than four in five (82%) SMEs say coronavirus has already had a negative impact on their business and nearly three quarters (73%) forecast coronavirus to continue to have a significant negative impact for the next three months.

However, many businesses remain positive about the future.

Only one in five (19%) think the virus will still have a significant impact after 12 months, and just 8% feel it will still have a significant negative impact in two years’ time, with 70% expecting a slight or no noticeable impact.

There are also early signs of growth in the short term, with Barclaycard Payments data revealing that the number of SME clients actively taking payments, both online and offline, has increased by 24% since the low point in early April, shortly after the start of lockdown.

Almost two-thirds 64% of SMEs say they are planning to invest in their business over the next 12 months.

Their top areas of focus will be marketing 26% and new equipment and technology 20%.

Commenting, Konrad Kelling, head of small business acquiring at Barclaycard Payments, said: “It’s encouraging to see small and medium-sized businesses starting to come online again as we emerge from lockdown.

“While we don’t expect an overnight recovery, the resilience and perseverance of small businesses gives us optimism as we look towards the next 12 to 24 months.”

 Adding: “It’s not surprising to see that small and medium-sized businesses feel the environment will continue to be challenging this quarter, with SMEs highlighting disruption to their supply chains, difficulty reaching customers and adapting to entirely new ways of working as key challenges.

“We understand why SMEs are worried – and we are working tirelessly to make it as easy as possible for small business owners to get the information and support they need.”

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Alex Douglas

The author Alex Douglas

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