With the current furlough scheme expected to come to an end on April 30, 2021, more than seven in 10 (71%) SME leaders are calling for it to be extended, research from Nucleus Commercial Finance reveals.1 Larger businesses, those with between 50 and 249 employees are feeling the pressure the most, with 83% calling for an extension.
The scheme, which has already been extended three times, has been a lifeline to SMEs during the pandemic, with the research finding that nearly half (45%) of SMEs currently have staff on furlough. However, the majority of business leaders are calling for the government to go further. More than a quarter (26%) of SME leaders say the scheme should be extended until the end of July, 16% until the end of October, 11% until the end of the year, and a further 18% believe it should be extended until the UK population has been vaccinated.
The pressure of the scheme coming to an end is taking its toll on SME owners. One in seven (14%) SMEs are expected to make redundancies once furlough ends and this is having a negative effect on business leaders’ mental health. Those planning on making redundancies are feeling both stressed (43%) and anxious (42%).
However, on a more positive note, 55% of SME leaders have not furloughed staff and 13% plan to make new hires this year.
Chirag Shah, CEO, Nucleus Commercial Finance said, “The furlough scheme has provided a lifeline to SMEs during a time of heightened uncertainty. Businesses have relied on the scheme to allow them to continue operating and prevent the UK from entering a major employment crisis.
“While the scheme cannot go on forever, an abrupt end could leave many SMEs struggling to survive, exacerbating the financial and mental health challenges many business owners are facing. As the return to normal is still a long way off for the majority, it’s vital the Chancellor listens to business owners and lays out a clear plan of action, so SMEs can look ahead to the coming months with some degree of certainty.”