More than a third (35%) of SMEs in the UK are increasingly concerned about their ability to gain funding in the run up to Brexit, a study by Hiscox has revealed. Recent economic and political uncertainty has adversely affected business confidence, and caused concern for the future as the UK’s withdrawal from the EU becomes nearer. This concern should come as no surprise, as 38% of the 500 businesses surveyed admitted to accessing EU funding.

Despite many funding options being made available to new businesses, 36% of business owners said a lack of choice was the most common single challenge they faced when looking for funding. Moreover, 28% of businesses cited a lack of eligibility as the reason holding them back from obtaining finance, and a further 25% said market competition was their key challenge.

Surprisingly, what emerged from the survey was that one in five businesses (20%) are still unaware of the variety of funding options available to them. Despite the arrival of new finance options for start-ups like crowdfunding and peer-to-peer loans, most small businesses still turn to banks. Three-quarters of businesses surveyed used bank loans for funding over the last five years. Other popular funding choices were EU funding and equity funding (both received by 38% of businesses over the last five years).

Almost a third (31%) of businesses surveyed said economic uncertainty had been the biggest factor impacting their growth in the last five years. In fact, 18% more businesses found economic uncertainty affected their growth than competition within their own industry (13%).

Steve McGerr, Head of Direct Commercial at Hiscox, commented: “With a Scottish independence referendum, election uncertainty and a vote on EU membership, it’s been a turbulent few years for the British economy. In light of this, it’s perhaps unsurprising that the unpredictability of Britain’s economic health has been a key issue for businesses.”

Another cause of concern for the UK’s businesses is the availability of skilled workers, with 10% of businesses facing obstructions to their growth due to a lack of skilled personnel. With the Institute for Public Policy Research finding that employers in Britain are currently spending over £6 billion less on training per year than the EU average, and the prospect of visa complications for foreign workers following Brexit, the growing skills’ gap could further hinder business growth in the UK.