The survey found SME owners have a range of concerns about how the Covid-19 pandemic will affect them, with some already having shut up shop for good
Nearly half of all small and medium-sized enterprise (SME) owners in the UK fear their business is under threat of closure due to the impact on trading caused by Covid-19 and the country’s lockdown measures.
This according to a new survey from insurer Simply Business, which found 41% of owners were concerned the pandemic would force them to close for good, and 4% said they’d already folded — a figure Simply Business suggested represents 234,000 firms when the results are generalised to the UK’s 5.8 million SMEs.
In financial terms, the survey calculated the total impact of Covid-19 will exceed £69bn ($84.5bn), a figure extrapolated by applying respondents’ estimates that the pandemic will cost them £11,779 each on average to all UK SMEs.
Simply Business UK CEO Alan Thomas 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.”
According to the Federation of Small Businesses, SMEs account for 99.9% of the UK business community, and the SME Confidence Report from Simply Business — which included a survey of 3,700 businesses — gave an insight into how they’re being affected by the pandemic.
The report said 67% of those surveyed have had to temporarily stop trading, 28% are earning less money, and 21% said they’re operating as usual but have lost work.
Despite the pressures faced by SMEs, 22% of respondents reported feeling optimistic about life after coronavirus, 75% said they will continue or restart their businesses after the pandemic, and 10% said they were confident they’d start a new business.
SME owners have concerns other than closure due to Covid-19
When it came to the specific concerns of small business owners, Simply Business found almost half (49%) were worried about losing customers or jobs due to coronavirus, and a further third (36%) were concerned about running out of money.
Also, 12% cited worries about going bankrupt, 10% were concerned about being able to pay back government support taken out during coronavirus, and one in five (20%) worried about being able to pay back money borrowed from relatives and friends as well as private loan companies.
On this latter point regarding loans, Simply Business noted that it had launched a financial support checker, so SMEs can quickly determine what financial support and schemes are available to them during the pandemic.
It launched this after the survey found 56% of SMEs said they’d been able to successfully access government support, and 47% mentioned that it was easy to find.
Over half responded that they’d accessed financial support from other areas, broken down into the following:
• 35% have borrowed from friends or family,
• 22% have used credit cards
• 8% have taken out wider or private bank loans.
On the launch of its financial support checker, Thomas said: “At Simply Business, we insure over 400,000 of these small businesses – from plumbers to accountants to dog walkers. And this means we’ve witnessed first-hand how hard many of them have been hit by coronavirus,” said Thomas.
“We want to support every small business in weathering this storm, knowing that they play such a vital role in our economy.
“Financial support has been vital in keeping small businesses going but with so many new government loans and support schemes available, it can be confusing for owners to locate what they’re eligible for.
“That’s why we’ve created a free tool to make it easier to access the wide range of financial support – both from the government and beyond.”