Third of SMEs to fold should lockdown last until March, study finds
- Credit: Sonya Duncan
Almost a third of some of the region's best-loved business will close before the end of the year if lockdown continues, a new survey has found.
A new study revealed 30pc of small and medium enterprises (SMEs) said they will close for good if the lockdown continues until the end of March, and a further one in four believed they will continue to operate but make no profit.
The research, conducted by financial institution Nucleus Commercial Finance, also found that one in 12 SMEs would have to make redundancies if lockdown measures continued.
The news was no surprise to Andrew Mower, the East of England's regional development manager for the Federation of Small Business(FSB).
A fifth of business said they would struggle to continue trading if they did not have access to increased financial support imminently, the FSB's latest confidence barometer showed.
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Mr Mower said: "Given the situation small businesses find themselves in a third of business closing by the end of the year is no surprise. It is well reported that the latest round of funding is nowhere near the levels we have seen before and is also targeted as certain sectors.
"Although it is appreciated for the hospitality and leisure sectors, there are a lot more SMEs out there than just this industry. It's supply chain, for example, won't be supported by this funding."
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Of the continuation of lockdown and a proposed "road map" out of restriction measures, Mr Mower said: "I think the reflections from the first two lockdowns from businesses' perspectives would just be clearer communication.
"It seemed that businesses were reading about proposed measures on the internet in the weeks running up to lockdowns instead of having it clearly communicated to them by government.
"This time they need to be given clear and simple direction so that they can plan accordingly."
Nucleus Commercial Finance chief executive Chirag Shah said: “With a third national lockdown under way, 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."