A recent survey has revealed that three out of five small business owners feel neglected by the government, as an increasing number of firms voice concerns about their struggle to survive.
Small and medium-sized enterprises (SMEs) are urging Westminster to implement additional measures to support businesses, with 57% fearing they may not last the next year – a significant increase from 50% last year, as reported by .
These worries, disclosed in Virgin Startup's most recent Founder Barometer report, emerge amidst escalating economic pressures for º£½ÇÊÓƵ businesses.
The cost-of-living crisis was identified as the primary challenge for SMEs at 33%, although this is down from 52% the previous year. Meanwhile, tax rates were a concern for one in five businesses.
The increased employment costs and high taxes introduced in Chancellor Rachel Reeves' Autumn Budget have added further strain on SMEs.
Earlier this year, the Federation of Small Businesses (FSB) pointed out that the rise in the national minimum wage and extensive changes to workers' rights could cause serious damage to smaller firms, leading them to reduce staff numbers.
SMEs lacking finance access
Access to finance was another major worry for one in five founders.
Over 60% stated they needed more assistance in securing capital, reflecting the difficulties firms have encountered with high street lenders.
High-ranking banking executives were called in for discussions with the Treasury earlier this year, following a scathing report from the Department of Business and Trade. The report revealed that the overall success rate for businesses applying for bank loans had plummeted to below 50%, a significant drop from the 67% approval rate in 2018.
In response, fintech companies have stepped in to fill the gap, with specialist neobanks such as Allica and OakNorth emerging to cater specifically to SME lending needs.
However, traditional lenders have slowly begun to re-enter the market, with SME lending in the first quarter of 2025 reaching its highest level since 2022.
As part of the º£½ÇÊÓƵ government's industrial strategy, the British Business Bank - a government-owned entity aimed at improving access to finance for smaller businesses - received a substantial £6.6 billion injection.
Andy Fishburn, Managing Director at Virgin StartUp, commented: "Small business founders are the backbone of the º£½ÇÊÓƵ economy, yet the research highlights a large proportion are feeling under pressure in the current economic climate, and it's concerning that so many are feeling overlooked by those who serve them. ".
"Despite the challenges many face, we're encouraged to see founders remain resilient, as they focus on growth, sustainability and innovation."
