One in four SMES say cost of living has impacted their wellbeing
One in four (26%) small business owners are reporting that cost of living pressures are causing a decline in their wellbeing.
Businesses reported rising inflation was the main threat to their company (41%), followed by the decline in consumer spend (38%), rising energy costs (36%), wage inflation (22%) and cash flow management issues (19%).
What’s more, HSBC UK identified a reluctance to talk about such threats, with over half (55%) not disclosing to anyone – not even friends or family – about the impact on their business.
Two in three (73%) said they had not talked to their bank about needing financial support and a third (29%) reported they had used their own personal savings to fund their business over the last few months. Over half (52%) said they preferred to research financial support online instead of speak to someone.
Commenting on the findings, behavioural psychologist Jo Hemmings said: “With the rising cost of running a company, on top of an increase in the cost of living, small business owners are facing a perfect storm.
“It’s not surprising that many are struggling with their personal wellbeing and it’s understandable that some feel reluctant to open up about the challenges ahead. But business owners shouldn’t see talking through their personal or professional concerns as any kind of admission of failure and research shows that internalising anxieties will not help.
“They are not alone and I’d urge those feeling the pressure of running a small business at this difficult time, to talk through their challenges with professionals who can provide practical help, including their bank.”
Behavioural psychologist Jo Hemmings
Despite under half (43%) of small business owners being worried about the impact of the next six months on their business, nearly two thirds (65%) said they were confident their business will survive. One in three (38%) expected to see a jump in profits next year, with professional services firms leading the way (67%).
HSBC UK’s early warning signs team are specially trained to identify customers that could be experiencing financial difficulty and have been proactively contacting them to discuss how they can help. Possible triggers can include repayments falling into arrears and insufficient funds available to make commercial card payments when due. HSBC UK customers who are showing early signs of financial difficulty and said this is impacting their wellbeing, have reported experiencing sleepless nights, increased anxiety and worrying thoughts about the future.
The response to HSBC UK reaching out has been positive with the majority of affected customers (68%) avoiding defaulting on payments for at least six months after.
Peter McIntyre, Head of Business Banking at HSBC UK, said: “With the current economic environment creating business uncertainty, it’s fair to say that many small companies have had a rough ride these last few months.
“Owners are at the helm, so it’s no surprise that navigating cost challenges is having an impact on their own personal wellbeing. The good news is that when customers engage with us early on they are more likely to avoid going into financial difficulty.
“We encourage all business owners to get in touch with us if they are worried about their financial situation – we are here to help.”
Solutions offered to customers are on a case by case basis but can include:
- Capital repayment holidays to free up cash within businesses
- Reviewing overdrafts or trade loans to allow stock to be held for longer
- Providing trade finance solutions to support customers with their supply chains
- Extending bounceback loan (BBL) repayments through the pay as you grow scheme
- Partial or total refinancing or restructuring of a facility
- Extension of recovery/collection periods
For more information visit: Financial Worries & Wellbeing (hsbc.uk)
Media enquiries to:
Hannah Langston, Senior Media Relations Manager, Commecial Banking
07384 792 248, ukpressoffice@hsbc.co.uk
Note to editors:
1 Survey conducted by YouGov on behalf of HSBC UK. Sample size was 604 owners of businesses with up to £5m turnover. Fieldwork was undertaken between 26 October – 7 November 2022. The survey was carried out online.
Cost of living support available to all HSBC UK customers:
- Rising Cost of Living hub: providing information on why cost of living is happening, tips to help save on costs, and help on where to go for additional support for any customers who are struggling. Since launch, the hub has been visited by over 116,000 customers.
- Free 1:1 financial health checks: customers and non-customers can book a call with a financial wellbeing consultant in order to receive information and support on managing finances. HSBC UK’s financial wellbeing consultants have also been working with businesses across the UK to deliver financial wellbeing sessions in professional settings to people at all stages of their career.
- Free financial health webinars: offering practical support and guidance to customers around managing their money, including budgeting methods and top tips for saving money on energy bills. HSBC UK has delivered 920 financial health webinars so far to over 14,600 people (both customers and non-customers).
About HSBC UK
HSBC UK serves over 14.85 million customers across the UK, supported by 23,500 colleagues. HSBC UK offers a complete range of retail banking and wealth management to personal and private banking customers, as well as commercial banking for small to medium businesses and large corporates. HSBC UK Bank plc is a wholly owned subsidiary of HSBC Holdings plc.
HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 63 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa. With assets of $2,992bn at 30 September 2022, HSBC is one of the world’s largest banking and financial services organisations.