A new study from the UK’s largest business group underscores the threat posed to millions of livelihoods by a sudden retraction of support for small firms in the weeks ahead.
FSB’s fresh survey of 492 small business owners finds that four in ten (41%) have been forced to close since the beginning of the coronavirus outbreak in the UK. Of those that have closed, 36% are not sure whether they will ever reopen again.
For those small businesses paying a mortgage or lease on their premises, over a quarter (28%) have failed to make, or faced severe difficulties in making, rent or mortgage repayments as a result of the pandemic’s economic impacts. 28% have had to shelve product development plans. Among exporters, over a fifth (23%) say they have had to either reduce or cancel international sales.
In response to the strain being placed on them, more than well over one-in-three (41%) small employers are considering, or have already made, redundancies.
Seven in ten (72%) small employers have furloughed staff to aid the survival of their business, illustrating the extent to which the Job Retention Scheme has protected the livelihoods of millions as economic activity has slumped.
As initial efforts are made to switch the economy back on, three quarters (78%) of these businesses say the ability to partially furlough workers would benefit them. Of these, over half (54%) say they want to bring staff back gradually, and 24% say it would keep their business viable.
FSB Regional Chairman, Les Philimore, said “These figures are stark evidence of the effect of the coronavirus pandemic on regional small businesses and as a fellow small business owner, it is of great concern to us all"
“Nevertheless, we are pleased with the efforts the Government has been making like the job retention scheme and welcome the most recent announcement offering more flexibility.
“This is a recognition that the economy will not go from zero to one hundred during the recovery phase and continued monitoring of the situation with bespoke financial schemes and support from the Treasury is a must.
“We also recognise that the help does not find its way into every business and we continue to speak to and represent our members who have fallen through the cracks in an attempt to find solutions.”
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, close to one in seven (13%) 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.
Close to one in ten (9%) business owners have applied for universal credit, with half (50%) having their applications rejected.
Meanwhile, of those small business owners that say they are not using the Self-Employed Income Support Scheme, the majority (72%), say this is because they are directors of limited companies. FSB continues to make the case for support for those excluded from existing grant schemes, including by calling for increased access to improved local hardship funds.