The study commissioned by the specialist insurer has found that business confidence has been adversely affected by the recent economic and political uncertainty and caused concern regarding the future as Brexit gets closer.

Out of the 500 businesses surveyed, 38% accessed EU funding.

Despite many funding options being made available to new businesses, 36% of business owners claimed that a lack of choice was the most common challenge they faced when searching for funding.

Some 28% of businesses claimed a lack of eligibility as the reason holding them back from obtaining finance, and a further 25% said market competition was their key challenge.

The survey also revealed that one in five businesses (20%) was still unaware of the variety of funding options available to them.

 

Banks still the 'go to' for funding

Despite the introduction of new finance options for start-ups – such as crowdfunding and peer-to-peer loans – most small businesses still turn to banks.

Three-quarters of businesses surveyed used bank loans for funding over the last five years.

Other popular funding options were EU funding and equity funding (both received by 38% of businesses over the last five years).

 

Economic uncertainty plagues Britain's SMEs

The survey also revealed that almost a third (31%) of businesses said economic uncertainty had been the biggest factor impacting their growth in the last five years.

In fact, 18% more of businesses found that economic uncertainty affected their growth than competition within their own industry (13%).

Another cause of concern for businesses in Britain was the availability of skilled workers, with 10% of businesses facing obstructions to their growth due to a lack of skilled personnel.

A recent study by the Institute for Public Policy Research found that employers in Britain were currently spending over £6bn less on training per year than the EU average, and the prospect of visa complications for foreign workers following Brexit – as well as the growing skills gap –could further hinder business growth in Britain.