Only two in four (39 per cent) of small- and medium-sized enterprises (SMEs) believe that they have enough money saved to keep their business afloat until the end of the pandemic, new research has found.
According to alternative lender Nucleus Commercial Finance, 23 per cent of SMEs had little or no savings before the pandemic hit, and 14 per cent think that their existing savings will not be enough to survive the coronavirus crisis.
Among those businesses which had savings, an average of almost £72,000 has been spent since the start of the pandemic. An estimated £87,579 is expected to be needed to get them to the end of the crisis.
Research by Nucleus found that SMEs had an average of £192,511 in savings prior to Covid-19. However, 80 per cent of business owners have had to dip into this savings pot since the pandemic began.
34 per cent of SMEs used savings to pay for overheads, while 27 per cent used their savings to pay staff. One in five (21 per cent) used their savings to make their premises Covid-19 secure, while 13 per cent used savings to get their business online.
“The effects of the pandemic and the subsequent economic slowdown has clearly had a significant impact on the UK’s SMEs,” said Chirag Shah, chief executive of Nucleus Commercial Finance.
“Not only has it brought about operational challenges, but the loss of income has been devastating for them. Those businesses that have successfully weathered the storm now face further challenges – needing significant capital to ensure that they can continue to operate.
“During these uncertain times, business owners should rest assured that there are financing options available to suit their needs, while achieving their goals and helping them future-proof their business.
“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.”