London, UK: - Leading B2B BNPL provider Hokodo has today announced new research which reveals that over half of respondent SMEs (56%) are still struggling to stay afloat, 2 years on from the start of the pandemic.

Earlier this year, Hokodo surveyed 500 SMBs across a number of industries to gain a better understanding of how such businesses were recovering from the pandemic, and the results were startling. 

The hospitality and tourism industry has been impacted the worst, with 77% of businesses still negatively affected. This news comes amid the cost of living crisis, with energy prices and inflation soaring. 

More than two years on from the start of the pandemic, 28% of small business owners admit they are barely breaking even. Meanwhile, a further 48% said that their business is now making revenue, but the financial state of their business has been difficult to manage. During the last six months, 28% have had some difficulties making payments or missed paying invoices from time to time. Worryingly, for 8% of respondents, missed payments have become a regular occurrence.

With around half (56%) of SME owners feeling somewhat positive about the future of their business in the next 12 months, there is some good news to be found in the survey results, but SMEs are still facing significant challenges, with business owners worrying about a number of issues. 

  • By far the greatest concern for SME business owners is increasing energy prices, which is currently worrying 49% of respondents.
  • Inflation rates are an issue for 43% of business owners.
  • Cash flow is causing problems for more than a third (39%) of SMEs – over 90% of whom had no cash flow concerns pre-pandemic. A quarter says that cash flow is no longer a problem, but it used to be during the COVID-19 lockdowns. 
  • Material costs are affecting 32% of respondents while labour costs are a struggle for 16% of businesses. 

One of the ways that SMEs can alleviate cash flow problems is by having the option to delay payment of their business purchases. 23% of survey respondents admitted that access to longer payment terms is crucial to their company’s survival over the coming 12 months. Meanwhile, 41% actively search for suppliers who offer credit terms, and 15% say that this is an essential requirement when sourcing suppliers. 

Perhaps adding to the financial strain is the fact that 45% of businesses occasionally have to grant their own customer payment terms in order to win deals, while 14% have to do this all the time, raising the question of why there has not been more provision made to support the B2B sector in this area. 

Richard Thornton, co-founder & co-CEO of Hokodo, comments: “It’s no secret that the last few years have been difficult for businesses globally. But while there is a common perception that the concerns of the pandemic are largely over, it’s important to remember that many SMEs are yet to re-establish their equilibrium. 

“With the increasing cost of living, inflation, and pressures of the energy price crisis – something that has been shown to significantly impact hospitality providers – SMEs are in need of greater support. Finding ways to better manage cash flow is at the heart of this, and contemporary trade credit solutions have the potential to provide the answer.”

Dig further into these findings and themes in Hokodo’s new B2B payments white paper