The fund has been specially created in response to real and growing concerns about access to finance from traditional lending sources and the impact that has on SME business’ ability to deal with the effects of inflation.

According to Capify’s Q1 2022 Confidence Survey, just under 60% of SME owners are now worried about the impact of rising costs and inflation on their businesses.

The survey, which featured the insights of 260 SME owners from a range of regions and industries, revealed the impact of inflation on cash flow and cash reserves. Thirty-seven percent of respondents cited cashflow as a major concern (up 14pp from 23% in Q4 2021), whilst over half of the survey respondents (53%) were concerned about the levels of cash in the bank.

Forty-seven percent of respondents identify these working capital and cash flow struggles as the primary driver for seeking external finance. But 52% of those surveyed stated that they would not be confident of securing that finance from their traditional banking partners.

The new fund aims to alleviate some of the potentially crippling cash crunch crisis and provide a much needed lifeline for businesses struggling with increasingly challenging conditions. The fund can also be accessed by businesses wanting to invest in their operations and realise their growth ambitions. Funding of up to £500,000 will be open to SMEs across a range of sectors that are already trading.

"Our most recent survey presented a very stark picture of the UK SME landscape”, says John Rozenbroek, chief operating officer at Capify. “Whilst many businesses were optimistic about their potential to grow sales and headcount, there was a real sense that access to finance is becoming an increasing concern”.

“These underlying concerns will have been accentuated by this period of inflation and the attendant price rises throughout the supply chain,” he adds.
As was the case in the aftermath of the 2008 financial crisis, demand for finance from SMEs is increasing across all sectors.

“As we saw in that last great recession, traditional banks restrict their lending criteria in uncertain times and make it difficult for SMEs to get the finance they so desperately need. Our new fund is a specific response to this gap in the funding landscape. It underlines that alternative lenders like ourselves will have a vital role to play in helping SMEs navigate these headwinds and allow them to capitalise on future opportunities”.