Huge numbers of small companies fear they will never re-open

Huge numbers of small businesses around the country fear they will never be able to re-open after being forced into closure by the coronavirus outbreak.

A survey by the Federation of Small Businesses (FSB) found four in 10 (41%) have been forced to close since the beginning of the coronavirus outbreak in the UK and that 35% of them believe they will never re-open.

The survey also found that more than a quarter of firms have failed or struggled to make rent or mortgage payments, and a similar proportion have had to shelve development plans. Among companies that export, 21% say they have had to either reduce or cancel international sales.

Around 71% have furloughed staff to help their business survive, but more than a third (37%) have either made staff redundant or are considering job losses.

And after Chancellor Rishi Sunak signalled he would extend the Government’s job retention scheme, almost three-quarters of companies said the ability to partially furlough workers would benefit them, and nearly half of these would want to bring staff back gradually.

FSB national chairman Mike Cherry said: “The impact of the coronavirus pandemic has been felt right across the small business community, with thousands of small firms all over the UK fearing for their futures. The Government has stepped-up with a huge range of support for millions of small businesses and sole traders, from income support schemes, to cash grants, to help with accessing finance and business rates breaks.

“Policymakers now need to realise that the economy will not go from zero to a hundred overnight once we’re into the recovery phase. The crucial support that’s on offer needs to be kept under review, and adapted to reflect the new normal as we chart a course back to economic recovery.”

The FSB survey is the latest to highlight huge problems facing the UK economy.

Earlier this week, the Natwest PMI said that the UK’s business sector was suffering unprecedented disruption from the coronavirus lockdown and was likely to see big rises in unemployment.

And research by Newcastle tech firm Sage revealed widespread concerns among small and medium-sized businesses about their future prospects.

The FSB study also highlights how many self-employed people and small business owners have struggled to get access to Government support.

Nearly one in 10 business owners have applied for universal credit, but close to a third have had their applications rejected and even among those who have had applications approved, the vast majority have not received payment.

Mr Cherry added: “The support measures that we’ve secured are helping the vast majority, but they’re not helping absolutely everyone. We’re hearing from business owners who are falling through the cracks and taking their stories straight to the top of government.

“Policymakers need to be in listening mode and prepared to help the most vulnerable over the challenging months ahead. No one should be left behind.”