Business leaders warn one in three firms might never reopen after coronavirus lockdown

Business leaders warn one in three firms might never reopen after coronavirus lockdown

The Federation of Small Business (FSB) study found firms were struggling to meet rent payments and had been forced to axe any plans for investment and expansion. More than 5,000 companies took part in the survey and 41 percent said they had been forced to close since the beginning of the coronavirus outbreak. A staggering 35 percent of those said they were not sure whether they would ever reopen again.

For those small businesses paying a mortgage or lease on their premises, 28 percent have failed to make, or faced severe difficulties in making, rent or mortgage repayments as a result of the pandemic’s economic impacts.

The survey found 25 percent had scrapped product development plans and among exporters, 21 percent had either reduced or cancelled international sales.

In response to the strain being placed on them, 37 percent of small business employers are considering, or had already made, redundancies while 71 percent have furloughed staff to try to ensure the survival of their business.

FSB National Chairman Mike Cherry said: “The impact of the coronavirus pandemic has been felt right across the small business community, with thousands of small firms all over the UK fearing for their futures.

“The Government has stepped-up with a huge range of support for millions of small businesses and sole traders, from income support schemes, to cash grants, to help with accessing finance and business rates breaks.

“Policymakers now need to realise that the economy will not go from zero to a hundred overnight once we’re into the recovery phase.

“The crucial support that’s on offer needs to be kept under review, and adapted to reflect the new normal as we chart a course back to economic recovery.”

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He continued: “Take the Job Retention Scheme. A big chunk of small business owners who have saved jobs by making use of it say that the ability to furlough staff on a part-time basis – allowing them to work according to client demand and gradually come back into the workplace, whilst being supported by the scheme the rest of the time – would not only be helpful, it would save the firm.

“Part-time furloughing is not a nice to have, it’s fundamental to saving jobs.”

The new study also highlights those within the small business and self-employed community that have struggled to access government-initiated support.

Among small firms that pay business rates, 15 percent say their landlord charges them for rent and business rates in a single recurring bill, meaning they risk missing out on cash grants linked to the payment of rates.

Mr Cherry said: “The support measures that we’ve secured are helping the vast majority, but they’re not helping absolutely everyone.

“We’re hearing from business owners who are falling through the cracks and taking their stories straight to the top of government.

“Policymakers need to be in listening mode and prepared to help the most vulnerable over the challenging months ahead. No one should be left behind.”

Chancellor Rishi Sunak yesterday announced the furlough scheme would be extended until October.

Published at Wed, 13 May 2020 13:35:00 +0000