Quarter of a million small businesses set to fold without more Covid help

5% of small businesses say they will go out of businesses this year without more coronavirus financial support

Over 250,000 small businesses are set to close this year without further Covid financial help, according to the latest FSB study.

Five per cent of small businesses surveyed said they do not expect to struggle on beyond 2021.

One in five small businesses made staff redundant between October and December last year. One in seven expect to do so before April.

>See also: Small business calls for multibillion-pound Covid-19 support package

The quarterly Federation of Small Businesses (FSB) Small Business Index (SBI) showed confidence at second lowest ebb in report’s 10-year history.

And the cohort expecting profits to fall in the first quarter this year hit an all-time high, with exporters having to deal with EU red tape as the UK-EU trade deal shakes down.

Mike Cherry, chairman of the FSB, said that although small business has welcomed the Covid help lifelines thrown to the retail, hospitality and leisure sectors, the government must realise that the small community is wider than that.

Nothing has been done for company directors, the newly self-employed and those who do not use commercial premises, Mr Cherry said.

>See also: Which small businesses can stay open in national lockdown?

Last week, the FSB published a five-point plan to resuscitate small businesses on life support because of the pandemic.

It also wants to see the government issue Brexit transition vouches, in line with Ireland and the Netherlands, to help firms cope with new bureaucracy because of the UK-EU trade deal.

Mr Cherry added: “The development of business support measures has not kept pace with intensifying restrictions. As a result, we risk losing hundreds of thousands of great, ultimately viable small businesses this year, at huge cost to local communities and individual livelihoods.

“A record number say they plan to close over the next 12 months, and they were saying that even before news of the latest lockdown came through.”

Further reading

Small business national lockdown – what support is available?

Avatar photo

Tim Adler

Tim Adler is group editor of Small Business, Growth Business and Information Age. He is a former commissioning editor at the Daily Telegraph, who has written for the Financial Times, The Times and the...