Almost half of small- and medium-sized enterprises (SMEs) predicted they had enough money to keep them running for a month, before the coronavirus outbreak hit.
Stark research conducted in February by alternative finance provider Nucleus Commercial Finance showed 47 per cent of SMEs lack a financial buffer.
The data shows that a lack of financial buffer was an issue for businesses across the country, with SMEs in the West Midlands and London more likely than those in any other region to face a financial shortfall.
More than two thirds, 69 per cent, said they were confident about their cash flow prior to coronavirus, six per cent would only be able to last a day, and a further 14 per cent would be able to last up to a week should they suddenly and unexpectedly be unable to trade.
“At a time of crisis, having access to finance is crucial,” Chirag Shah, chief executive of Nucleus Commercial Finance, said.
“While recent developments, such as the £330bn of government-backed loans are welcome news for the industry, we need more clarity on how this will help in practice and which businesses it will support.
“Supporting UK PLC is vital to the growth of our economy, and in order to do this government and industry must pull together and work collaboratively.
“We are working hard to process applications as quickly as possible, decisioning 95 per cent of deals within four hours of receiving the full application, to keep up with the increased demand we’re seeing for funding.”