Small and medium businesses across the UK are expecting a very challenging summer and many UK SMEs predict redundancies are likely to rise rapidly in August as lockdown starts to ease.
The total impact on revenue that SMEs expect from the coronavirus outbreak has reduced from minus 29 per cent at the start of lockdown to minus 10 per cent in May.
However, a poll of over 5,000 SMEs commissioned by technology firm Sage shows that 60 per cent of firms are considering redundancies. The government’s job retention scheme has been heralded as crucial to supporting small firms through the pandemic but employers will soon be asked to contribute towards costs, which will likely lead to job cuts.
Although lockdown restrictions are starting to ease, the Sage report highlights the scale of the challenge that lies ahead for so many UK small and medium business. The poll also shows that over 60% of firms are and have been operating at a loss due to the pandemic, and 68 per cent are experiencing a more that sales will reduce by over 25 per cent.
Also, the divide between sectors has started to widened , and for the hospitality and retail industries there has been little change in outlook since the start of lockdown. BY late May, the hospitality sector maintained expectations of 75 per cent hit to revenue showing the true damage the pandemic has had to this sector.
Unsurprisingly the extent of the issues that are effecting so many of us, means support and approval of government action has grown from 47 per cent at the start of lockdown to highs of 63 per cent in early May. This change in government approval corresponded with the introduction of the bounce back loans scheme, which offer 100 per cent government-backed loans of up to £50,000 to UK SMEs.