New Findings by Novuna Business Finance Indicate a Decrease in the Number of UK Small Businesses actively pursuing new ventures to secure future expansion
The confidence of small business owners in the UK has taken a downturn over the past year, with a decrease in the percentage of business owners predicting growth for the last four quarters, according to Novuna Business Finance's latest research.
This decline has been evident across various sectors. For instance, in the transport and distribution sector, the percentage of small businesses predicting growth has dropped from 76% to 73%. Similarly, in the manufacturing sector, the percentage has decreased from 83% to 69%. In the media sector, the percentage has dropped significantly from 86% to 61%, and in the real estate sector, the percentage has decreased from 72% to 44%.
In Scotland, forecasts dropped from a peak of 36% confidence last year to a low of 22% predicting growth in Q2 2025. In London, small business growth forecasts fell sharply from 57% at the end of 2024 to 37% in mid-2025.
Joanna Morris, Head of Insight at Novuna Business Finance, has commented on this slide in small business confidence and the fall in the percentage of small businesses working on new growth initiatives. She attributes this decline to factors such as increased employer National Insurance costs, uncertainty around tariffs, fears of tax rises, inflationary pressures, and challenges accessing funding without personal guarantees.
Despite the challenging short-term outlook, Novuna notes that periods of uncertainty can also be opportunities to invest in long-term success. The company remains committed to supporting established businesses to make investments aimed at future growth.
The most common defensive measures taken by small businesses to control costs and cash flow include keeping fixed costs down (58%), improving cash flow (31%), and tackling late payment (25%). Morris also noted an upturn in the percentage of small businesses reassessing their finance commitments to free up working capital, a trend that is up across six industry sectors this quarter.
The expansive initiatives that UK small businesses are most likely to be working on include hiring more people (17%), investing in new machinery and equipment (16%), and expanding into new overseas markets (16%). However, the fall in the percentage of small businesses working on long-term initiatives to secure future growth is a concern, as per Joanna Morris. The percentage of small businesses working on such initiatives has fallen for the first time in a decade.
Novuna Business Finance aims to help small businesses turn the corner and realize their full potential. The company provides flexible, tailored financial solutions to help established small businesses plan for long-term growth and transformation. Despite the current challenges, Novuna's latest Business Barometer data indicates that the growth expectations of UK small businesses have stalled or declined sharply in 2025, reaching multi-year low confidence levels reminiscent of the pandemic crisis.
- Amidst the declining confidence and growth forecasts for small businesses across multiple sectors, ffnews.com reports that the percentage of small businesses working on long-term initiatives to secure future growth has dropped significantly, as per Joanna Morris, Head of Insight at Novuna Business Finance.
- Personal-finance enthusiasts must take notice of the fall in small-business growth initiatives, as the decrease in investment in new machinery, hiring more people, and expanding into new overseas markets might have long-term implications, as indicated by Novuna Business Finance's latest research on small-business finance trends.
