Coronavirus set to cost SMEs over £69bn
The financial impact of coronavirus is set to cost UK small businesses more than £69bn ($85bn), with two fifths at risk of permanently closing.
This is the stark finding of a new report by small business insurer Simply Business.
The SME Confidence Report spoke to 3,700 small and medium enterprises (SMEs) and calculated COVID-19 would cost them an estimated £11,779 each via lost work and earnings.
Some 234,000 SMEs have already shut down while two thirds have temporarily ceased trading, according to the report.
The report also said SMEs are borrowing from friends and family, using credit cards and taking out private bank loans as well as relying on government support packages.
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The lasting damage of the pandemic has meant 41% of small business owners fear they will permanently close, with 14% of these believing it will happen within less than three months.
More than a quarter of surviving firms are earning less money and 21% are operating as usual but have lost work due to fewer customers and paused or cancelled contracts.
A further 17% say they are unable to work and are not eligible for furlough.
Top concerns include losing customers and jobs due to coronavirus, running out of money, going bankrupt and being unable to pay back government loans.
Alan Thomas, UK CEO at Simply Business, said: “No business has been able to escape the impact of the pandemic – and that’s no different for small businesses and the self-employed. Yet they are the lifeblood of the economy, and with many of these at risk of permanent closure, so much is at stake for our local communities and wider economy."
But he welcomed findings that three quarters of businesses plan to restart soon and a further 10% aim to start a new venture in the near future, revealing their "resilience".
