Small businesses facing mental health crisis
UK small business’ previous positivity about their future performance is being overshadowed by stress, anxiety and sleepless nights over access to finance according to research from Liberis, a fintech on a mission to reshape small business finance for good.
While an encouraging 61% of small businesses in the UK questioned before the coronavirus outbreak were confident of success in 2021 and beyond, mental health and wellness issues are currently impacting almost nine out of ten (86%) as a direct result of difficulties in raising finance and managing cashflow within their business.
The research, which contrasted the attitudes and behaviours of UK small businesses with their peers in the US, found that 83% of business owners suffer from anxiety and 81% from sleepless nights as a direct result of worries over raising finance. A further 75% also said it had impacted their personal relationships. (This compares to 91%, 85% and 86% respectively for small businesses in the US.)
Financial concerns have also led to more than two thirds (69%) of UK small businesses feeling the need to forego personal obligations (dinner with friends, parents’ evenings, and even weddings) compared to 75% of small businesses in the US.
Rob Straathof, CEO at Liberis, says that the financial community should do more to relieve the stress felt by small businesses: “Access to finance should not be a stressful experience,” he says. “While the government should be congratulated on the measures it announced in the budget and its subsequent £330bn loans package, it is critical for the support to be distributed as quickly as possible if businesses are to be supported through the current crisis. We need to work with the government to allow for quick underwriting and access to finance that works with fluctuating sales and won’t tie the business down in the long-term. Small businesses don’t have time to wait on legacy systems and approvals.
“There will also be life after coronavirus,” says Straathof, “and we need to listen to small businesses in addressing their concerns. Working from home and social distancing are both issues we have never faced before, and while businesses will need support in the immediate term, we also need to look to their longer-term needs. Our goal is to reshape small business finance for good and that means providing funding that is appropriate, sustainable, and that gives them access to funds quickly when they need it.”
Straathof adds that almost half (48%) of small businesses believe that access to finance is the single biggest support they need to achieve their future potential: “We need to provide finance that ‘flexes’ with their customer sales, where the business pays less when times are difficult, and more when business is booming again,” Rob continues. “We need to be supporting their mental health by making access to finance easier and more transparent, not adding to it with unnecessary delay, confusion and intransigence.”