Restaurant owners, says the new Aviva SME Pulse report, are most likely to feel the heat currently. Nearly three-quarters (73%) of those with businesses in the catering sector "have seen a marked decline in the amount they withdraw from their business - with almost a third (29%) reporting a drop of between 20-25% and 10% reporting a drop of up to 50%."
Confidence under pressure
"Half of the SMEs we surveyed," said David Bruce, commercial product manager at Aviva, "said they had not asked for funds from their bank with the same number telling us they had reduced the money they took from their business, suggesting businesses may be 'self-funding' their activities. This could be forcing them to focus more on the day-to-day operations than on planning for the future."
Problems lurkingThe news is a poke in the eye for government, hopeful of a resurgence of private business and entrepreneurs to help make up the shortfall in public sector job losses. Aside from the difficulties of actual SME bank funding (too many UK banks are simply not lending enough to SMEs), there's another problem lurking.
It's connected to house prices. Many entrepreneurs take loans against the property they own, but with slipping house prices, many lenders are getting cold feet. Recently a report from lender Borro claimed that increasing numbers of entrepreneurs are also prepared to stake personal possessions as loan collateral for business loans.Think the family car, or other major assets. Even crates of wine, for those with such upmarket luxuries.
On the other hand, another survey carried out Experian, claimed UK SMEs had increasingly "positive expectations" for 2012. So there's a fair amount of contradictory noise out there. Tell us, if you're a business owner, if you're thinking of giving it all up - or are optimistic that things will get better.