Over one-third of UK SMEs have been “completely disrupted” by the pandemic, according to new research by FreeAgent.
Overall, 87 percent of surveyed UK SMEs highlighted that their business had suffered due to coronavirus, with further research suggesting that SMEs are all at different stages of recovery as the UK begins to emerge from lockdown.
ACCA UK and the Corporate Finance Network’s SME Health Tracker found that 40 percent of SMEs receiving government Bounce Back Loans aren’t receiving enough to cover liabilities for the next 12 months.
Additionally, 68 percent of SMEs are deferring their tax payments, although many expect do expect to pay these tax liabilities back within six months.
“I think people are worried about what happens when the government support ends,” says Gurpreet Sandhu, director of accounting firm 3 Wise Bears. While some of Sandhu’s client base has been hit hard by coronavirus, he noted that those within the e-commerce sector found some success during lockdown, highlighting the differences each SME is facing.
“I know that a lot of them were planning to make redundancies from July, but the government extended the support up until October, so some of those redundancy decisions have now been delayed – but they could just come back later,” Sandhu says, speaking of his clients. “A lot of it is going to depend on how people react after the lockdown stops.”
Over half of YouGov-surveyed businesses also anticipated their finance function returning to normal within the year, with a bold 38 percent expecting that normalcy ‘straight away.’
Interestingly, 69 percent of YouGov respondents believe the UK is approaching a major recession, and 77 percent expect small businesses to struggle with cash to survive the pandemic.
However, the SME Health Tracker found that only 27 percent of SMEs have reviewed their financial forecasts and planning with coronavirus in mind