17 pc of SMEs used a government loan during Covid

Almost a fifth (17 per cent) of small- and medium-sized enterprises (SMEs) said they had used a government loan for support during the Covid-19 crisis, research has found.

Personal guarantee insurance provider Purbeck Insurance Services conducted a survey on SME employees to discover what actions they took to deal with the pandemic.

The results revealed that 64 per cent of SMEs either cut back on staff and their hours or took advantage of government support. Some 31 per cent used the furlough scheme.

18 per cent cut workers’ hours, 18 per cent reduced headcount and 13 per cent cut back on their workforce.

Read more: Government urged to delay new insolvency rules to protect SMEs

However, over one in three SMEs (36 per cent) have taken none of these actions.

Despite the unemployment rate expected to hit the highest level since the financial crisis next year at 7.5 per cent, 38 per cent of workers said they feel positive about the year ahead.

48 per cent were unsure about their job prospects and career progression going into 2021 while 14 per cent feel quite negative.

Read more: Insurer notes spike in new business loan activity in September

About a quarter (26 per cent) of SME workers feel more loyal to their employer after how they have dealt with the coronavirus, with 12 per cent reporting they knew their boss had sacrificed their salary to prop up the business’s finances.

Video conferencing received a mixed reaction from SME workers. 29 per cent want to stop using these tools once the pandemic is over while another 29 per cent think they will remain, as they provide a time-efficient way of conducting business.

Read more: Fifth of SME owners have taken pay cut during pandemic

“The owners and directors of small and medium-sized businesses across the UK should feel proud of how they have dealt with the unprecedented challenges created by the pandemic,” said Todd Davison, managing director of Purbeck Insurance Services.

“Despite the immense financial pressures many business owners have faced, particularly those that are shouldering huge risk by acting as personal guarantors for business loans, they have managed to boost staff loyalty through their handling of the crisis.

“The jury is, however, out on video conferencing. Love it or loathe it, with working from home likely to become permanent for many people it looks like our Zoom days are far from over.”