Research finds a fifth of small and medium-sized firms unlikely to survive shutdown
Small and medium-sized business across the country will be forced to close despite the promise of support in the form of government-backed emergency loans.
According to the BBC research by accountants working with more than 12,000 small and medium-sized businesses found that one-fifth were unlikely to survive the next four weeks.
It means that between 800,000 and 1,000,000 business across the country could close due to delays receiving support.
Two weeks ago chancellor Rishi Sunak unveiled Coronavirus Business Interruption loans of up to £5m, but it is reported that many firms have either been refused loans, have not been able to get through on phone lines, or have been told the money would take weeks.
A jewellery shop owner who employs 40 people told the BBC that he was denied a loan as the business made a small loss in 2019, despite it looking likely to be profitable in 2020.
Peter Jackson said: "I thought the whole point of the loans was to help business like mine stay afloat. But they're not going to help."
Last week Jack Stein told The Caterer of the "heart-breaking" situations operators were facing waiting for emergency support and called for more clarity on when relief would be available.
Jack's parents Rick and Jill Stein established the family business – the flagship of which is the Seafood Restaurant in Padstow – more than 45 years ago and it employs around 650 people. After criticism of its approach to keeping the business afloat, Jack has called on insurers, banks and the government to provide clarity on when financial relief would be available.
He said: "We're a seasonal business and we're coming out of the winter. We make a loss until May, so our cashflow is so tight – this just couldn't have happened at a worse time.
"Before the government announced the furlough scheme it would have been a matter of weeks before we had no money – our bank facility is maxed out and everyone is scrambling. We were looking at everyone losing their jobs and us losing the business, which in turn would have affected our supply chain and been the end of everything built up over 45 years. It was heart-breaking and we know it's the same across the whole industry.
"The fact this money is taking time to come through is the pressure. The problem is the devil's in the detail and the details need to be clear. We're saying hold on, it's coming, but we need to know a date."
Image: Shutterstock
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