Coronavirus set to cost UK SMEs £69bn
Coronavirus could cost the UK’s SMEs more than £69bn, with two-fifths at risk of permanently closing, according to a report by small business insurer Simply Business.
The SME Confidence Report spoke to 3,700 small and medium sized enterprises across the UK in May and found that they estimate Covid-19 will cost them £11,779 each on average – including lost work and lost earnings.
With over 5.8 million SMEs in the UK, accounting for over 99% of all businesses, this amounts to a cost of over £69 billion across the UK.
Furthermore, two-fifths (41%) of small business owners fear their business is at risk of permanently closing due to the pandemic. Well over a tenth (14%) believe they’re likely to close within one to three months; one in 10 (12%) within three to six months, and another one in 10 (11%) within six months to a year.
The study also revealed that 4% of small business owners state they have already permanently ceased trading due to the pandemic – amounting to an estimated 234,400 SME closures across the UK.
SMEs surveyed said they had been affected by coronavirus in a number of different ways. Over two-thirds (67%) have had to temporarily stop trading. Meanwhile, more than a quarter (28%) are earning less money and one in five (21%) are operating as usual but have lost work. A further 17% say they’re unable to work and are not eligible for furlough.
When it comes to the specific concerns of small business owners, almost half (49%) say they worry about losing customers or jobs due to coronavirus, and a further third (36%) are concerned about running out of money.
Financial Support to SME’s
One in 10 (12%) worry about going bankrupt, a further 10% are concerned about being able to pay back government support taken out during coronavirus, and one in five (20%) worry about being able to pay back money borrowed from friends and family or private loans.
The research also showed that SMEs have been receiving financial support from a number of sources. A third (35%) have borrowed from friends or family, over a fifth (22%) have used credit cards, and just under one in 10 (8%) have taken out wider or private bank loans.
In terms of support, three in five (58%) SMEs feel supported by the government – with over half (56%) saying they’ve been able to successfully access government support, and just under half (47%) mentioning that it was easy to find.