A new study from the UK’s largest business group underscores the threat posed to millions of livelihoods by a sudden retraction of support for small firms in the weeks ahead.
FSB’s fresh survey of 5,471 small business owners finds that four in ten (41%) have been forced to close since the beginning of the coronavirus outbreak in the UK. Of those that have closed, 35% are not sure whether they will ever reopen again.
For those small businesses paying a mortgage or lease on their premises, over a quarter (28%) have failed to make, or faced severe difficulties in making, rent or mortgage repayments as a result of the pandemic’s economic impacts. A similar proportion (25%) have had to shelve product development plans. Among exporters, a fifth (21%) say they have had to either reduce or cancel international sales.
In response to the strain being placed on them, more than one in three (37%) small employers are considering, or have already made, redundancies.
Seven in ten (71%) small employers have furloughed staff to aid the survival of their business, illustrating the extent to which the Job Retention Scheme has protected the livelihoods of millions as economic activity has slumped.
As initial efforts are made to switch the economy back on, three quarters (74%) of these businesses say the ability to partially furlough workers would benefit them. Of these, half (50%) say they want to bring staff back gradually, and one in three (31%) say it would keep their business viable.
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.
“Take the Job Retention Scheme. A big chunk of small business owners who have saved jobs by making use of it say that the ability to furlough staff on a part-time basis – allowing them to work according to client demand and gradually come back into the workplace, whilst being supported by the scheme the rest of the time – would not only be helpful, it would save the firm. Part-time furloughing is not a nice to have, it’s fundamental to saving jobs.”
The new study also highlights those within the small business and self-employed community that have struggled to access government-initiated support.