The number of small businesses struggling with barriers to growth has has jumped from 75 per cent to 91 cent in the last six months, according to new figures.

The data from Hitachi Capital Business Finance show this correlates to a sharp fall in the percentage of small businesses that predict growth (down from 39 per cent to 14 per cent in the last three months).

The study asked a nationally representative sample size of 1,268 small business leaders which barriers were holding their businesses back from growth.

Since the outbreak of Covid-19, there has been a fall in the percentage of small businesses worrying about general economic uncertainty linked to Brexit (down from 53 per cent to 49 per cent), an issue that dominated their outlook last year. Instead, as a result of the pandemic, more businesses are looking at their own business plans and are more concerned over the future of their business (up from 27 per cent to 32 per cent). This trend was mirrored across all key industry sectors.

As some business sectors prepare to come out of lockdown, around half of the respondents also mentioned additional specific challenges they regarded to be barriers to getting their business back on track. Volatile cashflow was a key challenge and many small business leaders felt high street banks were not being as supportive as they could be.

The challenges include:

* Volatile cash flow 24%

* Red tape 11%

* Banks being restrictive on lending money 10%

* Lack of understanding from lenders 7%

* High bank fees and charges 6%

* Cost of skilled labour 5%

* Value of sterling / exchange rates 5%

Across industry sectors, there has been a significant rise in the percentage of small businesses that currently perceive barriers to growth. During 2019, with concerns over Brexit, the percentage of small businesses that worried about barriers holding them back was high. Six months on, Covid-19 has taken fears to a new level.

Percentage of small businesses that perceive barriers to growth by industry sector:

                            Q2 2020    Q4 2019

Manufacturing    94%           87%

Construction       93%            71%

Retail                    91%            80%

Finance & accounting 90%    77%

Hospitality & leisure 96%      81%

Legal                     94%           66%

IT & telecoms       87%           73%

Media, marketing 93%           81%

Medical and health 95%        56%

Education              91%           65%

Transport & distribution 92% 79%

Real estate            81%             75%

Agriculture            80%             78%

Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance, said: "In recent weeks, many have celebrated news on the gradual lifting of lockdown restrictions, but now is the time to be sensitive to the real challenges that small businesses face when they reopen their doors for business. Our latest findings make clear the scale of the challenge, with nine in 10 business owners feeling there are things holding them back. Market related factors from Brexit and Covid-19 are hard to deal with, but there are also specific issues relating to red tape, cashflow and finance that can be tackled."