Three Quarters of UK SMEs Unsure They Can Pay Bills Next Month, New Data Warns
Three quarters (76%) of UK small and medium sized businesses, in particular in the hospitality sector say they are unsure whether they can meet their financial commitments over the next month, highlighting an immediate cash flow risk across the UK’s SME economy.
New survey data from The Director’s Helpline – a free, impartial support service for SME directors and sole traders – suggests large numbers of firms are operating month to month under mounting financial pressure.
The data is based on responses from 403 UK business owners who completed a Business Health Check assessment, and highlights mounting short-term pressure across the SME economy.
Only 24% of respondents said their business is in a good position to cover upcoming costs such as rent, payroll and supplier payments. More than a third (35%) said they are likely to miss payments in the coming weeks, while a further 32% said meeting costs would be “tight”.
Despite this uncertainty, four in five respondents (80%) said their business is still trading, painting a picture of an economy characterised by survival rather than stability.
Debt is now common across UK industry, with 78% of directors reporting outstanding liabilities. Over half (57%) owe more than £25,000, while nearly four in 10 (39%) reported debts exceeding £50,000. At the highest end, 6% said their business debt exceeds £250,000.
Tax arrears appear to be a significant contributor, with more than half (53%) of respondents saying their business has unpaid HMRC liabilities.
Only 33% of businesses said they are fully up to date on payments overall.
The pressure is not only financial, either. Nearly two thirds (63%) of business owners said they feel stressed, overwhelmed or close to burnout, while just 31% feel confident making key business decisions in the current economic climate.
When it comes to advice or support, over half (52%) said they feel they are running their business alone.
Jonathan Cooper, Founder and Director of The Director’s Helpline, said: “The findings reflect a long standing issue around access to timely, impartial advice when financial pressure begins to build.
“We set up The Director’s Helpline almost 10 years ago because too many business owners were being forced to make high stakes decisions without clear guidance on their options.
“What this data shows is that many directors are operating month to month under intense pressure. We’re seeing the greatest demand for support coming from construction and property, hospitality, travel and leisure, and retail businesses, where rising costs, volatile demand and tax arrears are colliding. Most of these businesses are still trading, but without stability, clarity or confidence about what comes next.”