UK200Group Coronavirus Business Impact Survey – April 2020

Executive Summary

The responses to this survey confirm the widely held view that SMEs have been dramatically impacted by the effect of the pandemic. A total of 1,793 respondents, 42% report that they have closed their business as a result of the lockdown. A full 88% of respondents have had to scale down operations or close.

52% of respondents have furloughed some or all of their employees. Only the smallest businesses have had to make their staff redundant, with 2% of respondents having done so. Recruitment is frozen across the board. There is stratification between businesses of different sizes here; the larger businesses are making much more use of the furlough scheme than the smaller businesses (comparing businesses of 5-50+ people to those of 2-5 people).

The outlook shared by respondents in bleak. If the lockdown extends to 30 June, 73% of respondents expect to scale down or close (17% expect to close permanently). Again, we see that bigger businesses expect to be more resilient; 1 in 5 of those with fewer than 10 people expect to close permanently. If the lockdown goes beyond 30 June, a full 31% expect to close permanently, while bigger businesses again appear to feel most resilient as a smaller (but significant) 24% of businesses of >10 people expect to close permanently.

Despite this outlook, 71% of respondents have not approached the banks for support. Why? We can only speculate in terms of this survey. Is there no confidence in future performance to take on debt? Of the businesses who have approached the banks, 66% have had problems or have been refused funding. Bigger businesses see a greater proportion approaching the banks, with 56% of >50 people businesses having done so (vs 29% overall). There is a different experience felt by different business sizes; of applicants to the banks, 71% of applicants of 2-10 people have experienced difficulty, vs a smaller 44% of >50 people applicants.

The respondents are almost united in the impact they have felt from the lockdown, and their pessimistic outlook for the coming months and beyond. The furlough scheme has certainly been accessed, while bank support is interestingly much less accessed. We see different experiences of business sizes throughout the responses.

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