Recession Alarm Rings: Economic Pessimism Builds Post-Budget

UK SMEs Brace for Economic Storm

After the Autumn Budget, the mood in the world of small and medium‑sized enterprises (SMEs) is shifting from hopeful to downright anxious. A fresh Q3 2024 SME Expert Index from iwoca paints a picture that is far from happy:

Industry brokers report that 34% of their SME clients are now feeling pessimistic about the future—a more than double jump from 15% in the last quarter.
Only 36% of brokers say their clients are optimistic—down sharply from 56%.
Nearly half (47%) of brokers find SMEs worried about a recession, up from 35%, reversing a year of easing concerns.

Survival Mode Over Expansion Mode

With costs creeping up and the economy shaky, SMEs are leaping from the dream of growth straight into the survival lane. The top reason why firms are applying for loans is cash‑flow management (61%)—previously only 49% a year ago.

In contrast, a mere 36% of SMEs are chasing loans to drive growth, the lowest figures since Q3 2023. The shift signals a hard‑real need for financial stability.

Big Loans Are Becoming the New Trend

Almost half (45%) of brokers anticipate a big spike in loans over £100,000 within the next year.
About 15% foresee even larger loans surpassing £200,000.
Responding to the demand, iwoca has doubled its Flexi‑Loan cap to £1 million—giving SMEs the room to breathe.

Word from the Chief Commercial Officer

Colin Goldstein, CCO UK at iwoca says:

“Rising pessimism and fears of a recession are reshaping SME mindsets, focusing more on survival than growth. We see an uptick in the need for bigger loans to bring financial stability in uncertain times. We’re proud to have lifted the Flexi‑Loan limit to £1 million, giving SMEs the flexibility they need to regain confidence and reignite growth ambitions.”