1 in 3 small firms may never reopen once lockdown is lifted

One in three companies that have been forced to close down due to Coronavirus, fear that they may never reopen, according to a survey of thousands of small businesses by Britain’s largest employers’ group.

Despite the government's promise in providing emergency support packages for businesses, small employers have said that they were considering or had made redundancies as a result of being in lockdown.

Seven in ten of the respondents to the survey of more than 5,000 companies, are using the furlough scheme provided by the state, which has pledged to support 80% of wages.

The Federation of Small Businesses (FSB), which conducted the research, said that a sudden retraction of government support would pose a threat to “millions of livelihoods”.

Three quarters of employers expect to benefit from yesterday’s extension of the furlough scheme to October and the ability to have workers back part-time from August. However, employers will be expected to help the government pay for the furlough scheme from August.

It has been found that more than a quarter of small businesses paying a mortgage or lease on their premises have failed to make, or faced severe difficulties in making, repayments as a result of the pandemic’s economic impacts, mentioned the FSB.

Mike Cherry, FSB chairman, said “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 as we chart a course back to economic recovery".

Source: Business Matters