Small businesses’ confidence has slumped to the lowest level since the financial crash in 2011, according to a major survey.
The Federation of Small Businesses’ (FSB) Small Business Index (SBI) polled over 1,000 small businesses at the end of November and early December last year.
And it found more than half say the domestic environment is a significant barrier to growth.
In addition, confidence among retailers has plunged as high streets continue to struggle, while borrowing costs for small firms has hit a four-year high.
FSB Kent area leader Deborah Turner said: “How have politicians allowed it to come to this? Two and half years on from the Brexit vote and small businesses are looking ahead to Brexit day with no idea of what environment they’ll be faced with in less than ten weeks’ time.
“The danger of a serious economic shock posed by a chaotic no-deal Brexit is real and imminent. It’s time for politicians to stop the in-fighting and agree on a cross-party way forward.
“The current uncertainty is making it impossible for firms to plan, hire and invest. That’s feeding into wider concern about the economy at large. We won’t see GDP growth pick-up again until there’s some certainty about how the business environment will change in the coming months.
“Come the beginning of April, small firms will not only have Brexit day to worry about but also a higher living wage, Making Tax Digital [a new tax initiative being rolled out by the government] rising auto-enrolment contributions and further business rates hikes. This will be a flashpoint for a lot of businesses, threatening the futures of many.”
The new SBI also shows borrowing costs for small businesses soaring. The proportion of successful credit applicants being offered a borrowing rate of 5% or more has hit a record-high (74%).
The proportion of small firms applying for external finance remains stubbornly low at around one in eight (13%).
Deborah Turner added: “With Brexit taking up all of the government’s bandwidth there are a huge number of domestic business issues that are not being addressed. They include the long-standing barriers small firms face when trying to access new finance, and the sky-high borrowing rates they’re often offered if an application is successful.
“This is another issue that will be exacerbated by a chaotic no-deal Brexit. When times are tough, big lenders often put supporting small businesses on hold.”