Smaller firms are battening down the hatches in response to growing uncertainty about Brexit and the weak government.
The Monitor said that many small firms opting to reduce their exposure to external finance and focus more on self-funding.
The latest analysis of what has happened in Q2 reveals some segments of the customer base are struggling to deal with the ongoing “lack of cla around the future.
Larger SMEs remain a much better target for those resellers advising investment as they are much more likely to be prepared to seek finance to support business growth.
Shiona Davies, director at BDRC said that there had been no dramatic market changes since the referendum. However, there are signs in the first half of 2017 that larger SMEs, whilst concerned about the economic climate and political uncertainty, are looking to grow and to use finance more than before.
“For the smallest SMEs, the picture is slightly different,” she added. “Like their larger peers, many of them have made a profit and more of them are holding £10,000 or more in credit balances. These sole traders have become less likely to be planning to grow over time and less willing to borrow to grow. They would be more likely to either self-fund a new business opportunity or turn it down because of concerns over getting into debt”.