A survey of more than 450 SME owners carried out by The Allica Bank Great British Entrepreneur Awards headline sponsor Allica Bank reveals that despite inflation and interest rates having stabilised in recent months, 72% of SMEs believe running a business has become more difficult over the past 12 months.

When it comes to what’s driving this sentiment, 42% of respondents see ongoing economic uncertainty as weighing on their business while 41% identify higher costs as a cause of concern. A quarter of respondents see poor consumer confidence as an issue.

The survey also reveals SME concerns about the recent Autumn Statement. While the impact of the policies announced by the Chancellor of the Exchequer remains to be seen, 46% of SME owners believe they will make business much more difficult. More than a third (35%) of SME owners meanwhile believe the budget will have a very negative impact on the economy.

Despite the challenges facing SMEs, the latest data also reveals that the entrepreneurial spirit is alive and well amongst Britain’s SME community, who take making-things-happen into their own hands.

According to the survey, 85% of businesses are self-funded to date but 40% of SMEs are looking to raise investment in the next 12 months. 76% of respondents meanwhile are aiming for profitable growth over the next eighteen months. Advances in technology and automation also mean 48% are looking to achieve greater operational efficiencies.

With 45% of UK SMEs selling products and services overseas, 30% of respondents are also focused on international expansion over the next eighteen months.

The data is released as SMEs and entrepreneurs from across the United Kingdom gather for the annual Allica Bank Great British Entrepreneur Awards. The awards celebrate the best of British innovation and the hard-working SMEs that account for more than three fifths of employment across the country.

The latest data also reveals how many SMEs are being underserved by high street banks. A majority of SME owners (68%) bank with one of the big six high-street banks but only 41% of survey respondents believe their business gets the attention it deserves from its bank. A further 47% are receiving no interest on their business savings.

Allica Bank’s recent saving squeeze report reveals that compared to larger corporate businesses, many SMEs are being offered lower rates or even no interest on their savings by traditional banks. This ‘lost interest’ is costing the average business £2,268, equivalent to around £9 billion of unrealised interest across the whole country.

While a lot of the SMEs surveyed were busy putting their capital to work, more than a quarter have over £100,000 in savings meaning this lost interest could be substantially more.

Commenting on the findings on the eve of the GBEA Awards in London Conrad Ford, Chief Product Officer at Allica Bank said: 

“SMEs are the backbone of the UK’s economy, accounting for more than five million businesses and three-fifths of employment. All too often these businesses are overlooked by policymakers and banks. As a prior entrepreneur myself, I was not at all surprised to see this sentiment reflected in today’s survey results.

“In this challenging climate, it is absolutely vital that an entrepreneurial culture is encouraged. I was therefore delighted to see 77% of respondents suggesting that entrepreneurship should be taught in schools.

“While there are certainly challenges ahead, it is encouraging to see a strong appetite for growth and innovation remains amongst UK SMEs, and the Allica team is ready and waiting to offer our support in whatever way we can.

“We wish everybody nominated at the Allica Bank Great British Entrepreneur Awards the best of luck. Whoever wins, the awards are an opportunity for us all to celebrate the immense contribution that SME owners make to communities across the country, and to UK Plc.”