30 April 2025
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An overwhelming 92% of small businesses that adapted their strategies during the pandemic have made those changes permanent.
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Six in ten SMEs report that the pandemic made them better prepared to handle subsequent economic shocks, including inflation, geopolitical tensions, and macroeconomic ripples from tariffs.
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Two-thirds of small businesses anticipate growth in 2025, with technology identified as a key driver of investment.
Permanent Pivots
The research indicates that 64% of SMEs made significant changes to their business strategies in response to the pandemic as more people worked from home; online deliveries took precedence over in-person shopping and certain business models became unviable. These pivots included adopting new technologies (42%); launching new products or services (36%), and shifting to a new customer base (30%).
Notably, 92% of businesses that made these changes have continued them post-pandemic, demonstrating the long-term value of these adaptations.
Learnings from COVID-19: Enduring resilience
Six in ten businesses (58%) are better able to navigate headwinds thanks to their pandemic experiences, the permanent shifts they made and their improved personal and professional resilience. Specifically, businesses feel better equipped to handle economic uncertainty (62%), the high cost of living (49%), and supply chain disruptions (38%).
Additionally, 63% of small business leaders have changed their approach to running and planning their businesses. Almost half (47%) said they would be more likely to adopt new technology, 40% said they now take a longer-term mindset when planning, while 37% said they are more able to make difficult business decisions as a result.
Vik Gubskis, owner, 8 Rocks Deli & Wine, said: “Like many businesses, the COVID-19 lockdown threw a whole host of unprecedented challenges our way. We acted quickly, pivoting to takeaway and home delivery services which allowed us to continue trading.
"Ultimately, that experience has left us more prepared for the future. We have new revenue streams and have grown our team since the pandemic. The lessons we learned have enabled us to adapt our approach to managing finances, meaning we are now more able to plan ahead and negotiate better deals with suppliers. Despite the initial challenges, the pandemic led us to make lasting changes that have helped us grow our business.“
Positive Outlook for 2025 with increasing finance needs
Despite the macroeconomic headwinds, SME Britain remains positive and primed for growth. Two-thirds (65%) of small businesses expect to grow in the year ahead, and almost half (43%) are more confident about the next 12 months compared to last year.
Technology is a priority for growth investment, with 47% of SMEs focusing on digital transformation over physical expansion (31%). The pandemic has also influenced SMEs’ finance requirements, with 48% reporting changes to their financing needs. Three-quarters (74%) have increased their appetite for short-term financing, reserving balance sheet for future shocks and 61% have a greater need for business loans.
Lisa Jacobs, Chief Executive Officer at Funding Circle, stated, “Small businesses are the backbone of the UK economy, and this research highlights their enduring resilience, entrepreneurialism and determination to succeed, that I see in all our customers. Five years on from lockdown, SME Britain has fundamentally changed – short term adaptations have become permanent and profitable; strategies have shifted, and new technologies are now an integral part of their daily work life. The digital-first mindset that emerged during COVID-19 is now a permanent feature of SME strategy, positioning them for long-term success.
We look forward to fuelling these small businesses with our range of flexible finance solutions that are vital to drive growth.”
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Notes to editors:
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Funding Circle and Oxford Economics surveyed 500 Funding Circle customers in January 2025.
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All percentages cited are based on respondents who answered each specific question.
About Funding Circle
Funding Circle (LSE: FCH) is the UK’s leading SME finance platform. Established in the UK in 2010, and now the leading lending platform to SMEs, Funding Circle has extended more than £14.6bn in credit to over 110,000 businesses in the UK.
For SME borrowers, Funding Circle provides an unrivalled customer experience, delivered through its technology and data, coupled with a human touch. Its solutions continue to help customers access the funding they need to succeed. For institutional investors, Funding Circle provides access to an alternative asset class in an underserved market, and delivers robust and attractive returns.
