SMEs are losing a third of their income due to COVID-19 new study reveals.
The average small business has lost 34% of its income as a result of Covid-19 and many report long-term damage or closure if conditions do not return to normal by the Autumn.
These insights which were provided by specialist bank Aldermore highlight the increasing pressure business owners face as they still have no clear answer as to when they will be able to return to normal.
In his speech on Sunday addressing the nation, PM Borris Johnson encouraged those that were unable to work from home should return to work today (Wednesday,13th of May).
A rule that mainly applied for those in construction, laboratory and cleaning sectors, in a bid to kickstart the economy.
Just yesterday Chancellor Rishi Sunak announced plans to extend the furloughing scheme until October.
Many SMEs are reporting significant losses due to Covid-19, with 25% seeing a decrease of more than 70% of their income.
The hardest-hit businesses have been those in the hospitality and leisure industry with an average loss of 53% of their income followed closely by the food and drink industry with an average loss of 49% of their income.
Most SMEs estimated their business would see long-term damage or even closure, if conditions did not return to normal within the next five months 11% have already seen impacts which they believe will last for the long term and 3% were planning to close.
Businesses are having to survive in an environment which has never been more challenging or uncertain. The situation is continuously changing, and many SME business owners are having to swiftly adapt by finding ways to diversify their products and services, as well as cutting costs, managing supply chain arrangements, and furloughing staff in order to survive” says Tim Boag, Group Managing Director, Business Finance at Aldermore
?As a bank born out of the last financial crisis, we know the road ahead will be a difficult one, but that it can be overcome with the right help and support. Aldermore continues to work with business customers to respond to their needs and provide funding solutions wherever we can; including the Coronavirus Business Interruption Loan Scheme for asset finance and soon invoice finance.
We continue to engage with and influence a range of industry stakeholders in order to help businesses survive during this time of great uncertainty.