High costs push SMEs into survival mode as Government measures fall short

UK SMEs say specific Government initiatives designed to help them survive and grow don’t go far enough, according to new research from independent funder, Bibby Financial Services (“BFS”). 

The Q3 2025 SME Confidence Tracker, which surveys 1,000 UK SMEs, reveals that over half (52%) of small businesses believe measures such as the Fair Payment Code, Late Payments Review and the British Business Bank’s Bank Referral Scheme fail to protect and support them.

BFS’s research shows that despite optimism about their own prospects, higher costs and economic uncertainty continue to weigh heavily on small business owners. Overall, more than six in ten (62%) business leaders say inflation and high costs are major challenges, including recent rises in National Insurance and the national minimum wage, which SMEs say are reducing their ability to invest in jobs and growth.

Jonathan Andrew, CEO at BFS said: “The current economic climate is hugely challenging for SMEs that are seeing profit margins and spending power eroded, and overheads increasing. On top of continued supply chain pressures both domestically and internationally, these issues pose a significant risk to economic growth, but more importantly, they threaten the survival of thousands of small businesses across the country.”

Ahead of the Autumn Budget, the report highlights a clear set of priorities SMEs are demanding from Chancellor Rachel Reeves. At the top of their wish list, nearly forty percent call for low-interest loans (37%), over a third (35%) want reduced business rates and nine percent are calling for a reversal of the recent rise in National Insurance Contributions (NICs).

US tariffs are also cited as impacting profit margins for many small businesses. To help them reach customers in new markets overseas, nearly a quarter (23%) of survey respondents want the Government to establish new trade agreements and 19 percent would like designated support to alleviate the impact of international tariffs.

Jonathan Andrew added: “Businesses are crying out for support and are sending a clear message that the high cost of business experienced in recent years is reaching boiling point. What they need are practical measures that protect them against mounting cost pressures and volatile international trading policies. This support must be forthcoming if the UK economy is to prosper any time soon.

“There’s a real opportunity in November for the Chancellor to back Britain’s small businesses with bold measures that cut red tape, roll back the burden of increasing costs and improve the environment for international trade. SMEs need to see these promises turned into concrete actions that restore their confidence to invest, hire and expand rather than just survive.”