Over a fifth (21 per cent) of small- and medium-sized enterprise (SME) owners plan on using their personal savings to cover the costs of reopening their business, new research has shown.
Nucleus Commercial Finance has found that SME owners that had to shut down during the lockdown are having to spend on average £21,830 to fully reopen.
This is after having already lost an average of £251,471 due to the impact of Covid-19.
Implementing new health and safety measures was the biggest cost factor (44 per cent) for businesses that have already reopened following the lockdown, followed by staff salaries (33 per cent) and reconfiguring the layout of the space (26 per cent).
These remained the same for businesses of all sizes, however, medium-sized firms, those with 51 to 249 employees, thought investing in new technology (28 per cent) and introducing new contactless payment systems (22 per cent) were bigger concerns.
On average, SMEs have £29,983 of cash reserves available, however with the uncertain economic environment many business owners do not want to spend it all on reopening.
28 per cent plan on using cash reserves in the bank and over a quarter (27 per cent) are considering using government emergency loan schemes.
“The last few months have been a turbulent time for businesses both large and small across the country,” said Chirag Shah, chief executive of Nucleus Commercial Finance.
“Not only has the loss of income been devastating for many SMEs, but those businesses that are able to reopen in some capacity now face significant costs to ensure they can operate safely, putting a further strain on business finances.
“We need to help SMEs not only survive the current pandemic but thrive in the future. As such, we, as an industry, need to highlight the role that finance can play in the short-term, but also to support longer-term business goals and help them future-proof their business.
“During these uncertain times, business owners should rest assured that there are options available, and it’s our duty as an industry to educate them on the benefits of external finance.
“Together, we can help build a better future for SMEs, ensuring they are equipped to tackle further challenges, boost performance, and ultimately stimulate our economy.”