Nearly two thirds (62%) of UK small business owners remain confident about their business prospects despite the coronavirus crisis, according to Bionic, the business switching service.
The government’s response to the pandemic has forced many SMEs, particularly in the retail, hospitality and leisure space, to close their doors to customers. Responding to the lockdown, 78% of small businesses have pivoted the way their business operates to continue trading through the crisis.
Louise Hart, owner of a new family business restaurant, Hart + Co in Leamington Spa, has rapidly launched a delivery service to adapt to the changes, she said, “After the announcement, we sat down and had a few hours to come up with how we were going to do this. Do we close or do we fight? We obviously chose to fight, but that’s in my nature.”
The government has announced a raft of measures to support businesses affected, including grants, business loans and the Coronavirus Job Retention Scheme, to help cover the cost of employee salaries kept on by companies. Despite widespread awareness of the various government support schemes, there is concern among SMEs about the suitability and availability of these initiatives. Cash flow crunches and redundancies remain likely for some.
- More than a quarter (28%) of small businesses have already applied for access to the government’s financial assistance; a further 34% have researched how to access it.
- One in seven (15%) SME owners have tried to access funds but were unsuccessful.
- The average business can stay solvent on current cash reserves for 10 weeks (67.5 days). Only 32% have enough money to keep the business afloat for three months or more.
- Just 14% have already made staff redundancies, but 49% expect to have to lay off staff.
Richard Quigley, owner of fish and chip shop, Corrie’s Cabin, and a canteen on the Isle of Wight, said: “The advice from the government has been vague at best and not reassuring. We will keep paying our staff, but how to re-claim this money is not clear.
“The advice from the government is to use reserves, the grant or take a loan. But not all banks are part of the CBILS yet so a loan would be at 7% interest. The government assistance is more PR than action at the moment.”