Commercial News

3 in 10 SMEs say they will be forced to shut if lockdown is extended

Rozi Jones -
|
8th February 2021
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"With a third national lockdown underway, many SMEs have limited time they can survive without delivering more income."

At least 30% of SMEs say they will be forced to close for good by the end of the year the third national lockdown is extended until the end of March, according to new research from Nucleus Commercial Finance.

A further 25% say they will continue to operate but make no profit.

If lockdown continues until the end of April, 33% of businesses surveyed said they will be forced to shut, increasing to 37% if lockdown continues until the end of May, and 42% if it goes on until the end of the summer.

A possible extension is thought to put the most pressure on larger businesses (those with 50-249 employees), with 51% saying they will have to shut for good if lockdown is extended until the end of May.

Nearly a third (31%) of UK SME owners believe this lockdown will last until at least the end of March. An additional one in five (22%) expect it to continue until the end of April, and a further 14% until the end of May.

By contrast, however, some SME owners think a lockdown extension will benefit their business. One in five (20%) expect to continue to operate and deliver profit, and a further 6% believe an extension to lockdown will have a positive impact on their business.

Nucleus Commercial Finance CEO, Chirag Shah, said: “With a third national lockdown underway, many SMEs have limited time they can survive without delivering more income. Despite the government support measures in place, businesses can’t continue operating under such uncertainty and with limited notice about changes to restrictions. Businesses need a clear road map out of the pandemic, so owners can plan and have clear visibility of the support available to them.

“With the government support schemes coming to an end next month, we are seeing businesses stockpile CBILS loans ahead of the deadline in order to provide them with financial flexibility and security for the weeks and months ahead. During these challenging times, financial planning will be crucial, helping SMEs to future-proof their business in the current environment and beyond. Together, we can help build a brighter future for SMEs, ensuring they are well placed to tackle further challenges thrown their way and ultimately provide a boost to our economy.”

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