The UK’s small and mid-size enterprises (SME) are likely to raise their prices for customers in response to rising energy costs, a new report from premium finance company Premium Credit has found.
Premium Credit’s Insurance Index report discovered that nearly one in four (23%) SMEs will increase prices to attempt to recoup energy costs. Meanwhile, another 17% indicated that they will cut running costs by lowering pay rises and not replacing staff who leave.
Of the SMEs surveyed, just 4% said that they fear they may have to stop trading, while 8% said they will have to cut jobs to keep their business costs under control.
When asked what they can do to address spiking energy costs, 15% said they will look at more remote working for staff where possible, while 12% said they will cut back on buildings and office space, and another 5% said they will shut parts of the business.
The surge in energy costs could put a damper on business investment plans, the report noted. 11% of SMEs said that they will cut back on investing, while 13% said they will postpone plans for expansion. Also, 12% said they would run down company savings to afford their energy bills.
A worrying 38% of SMEs said that they do not know how they will address the issue of rising energy bills.
In spite of these worries, Premium Credit’s Insurance Index found that more UK firms are turning to credit to ensure they maintain important insurance coverage.
“SMEs are showing remarkable resilience in how they cope with rising energy bills but it is worrying that so many do not know how they will address the issue,” said Premium Credit chief sales officer Owen Thomas. “Our focus is to ensure our partners offer finance every time to their customers, and we work together to present a compelling finance option through a seamless experience.”
Thomas added that Premium Credit’s existing support for vulnerable clients is “tried and tested,” and that it is reviewing additional support during this time of uncertainty.
Premium Credit was acquired by the London and New York-based international investment firm TowerBrook Capital Partners in May.
