Nearly two thirds (58pc) of small business owners want lockdown to wrap up by the end of May.
Buckworths, the UK’s only law firm which works with start-ups and high growth businesses, surveyed over 500 SME owners and decision makers to gauge attitudes towards the government’s coronavirus measures and the economic impact of the ongoing lockdown.
The research found that 20pc of UK SMEs in the UK will not survive another month without another boost to their cash flow. This rises to a sizeable 62pc in Northern Ireland, 31pc in the West Midlands and 30pc in the East Midlands.
Boris Johnson could be announcing his exit strategy in the next few days and urgent action is needed. Over a quarter (27pc) of the businesses surveyed don’t think that the government funding will be enough for them to survive the effects of the pandemic.
The research showed that those in more affluent areas were more optimistic about the future of their businesses – only 14pc of firms in Greater London and 13pc in the South East are expected to close down by the end of May.
Financial difficulties are being compounded by a lack of support from landlords. Almost a fifth (19pc) of retail, leisure and hospitality businesses have had a rent holiday declined. Only 14pc said that their landlord was understanding of the impact of COVID-19 on their business and granted them a holiday on their commercial lease.
As strict lockdown measures are due to last at least another week, it’s not surprising that small business owners remain less than optimistic about how long it will take them to recover. Over a third (35pc) of SMEs in the financial sectors believe it will take them up to two years to recoup financial losses caused by COVID-19. Decision makers in the travel and transport (33pc), IT and telecoms (23pc) and retail sector (22pc) are expecting similar recovery times.
Michael Buckworth, Managing Director at Buckworths, says:
“The UK government has largely been on the front foot during the coronavirus crisis, announcing measures, such as the job retention scheme, almost before businesses had formulated their proposal.
“However, the government now seems to be on the back foot, reacting to pressure from business and the media to end the lockdown, and repeatedly failing to outline a viable exit strategy.
“With so many SMEs – particularly those in the retail and hospitality sectors – already saying that they are on life support, an extension would be the equivalent of pulling the plug. Not only would it devastate the UK economy and create a record spike in unemployment, but it would also lead to so many business closures that a return to normal pre-COVID-19 society would no longer be a feasible option.”