Almost a third of small- and medium-sized enterprises (SMEs) – or just under 1.8 million businesses – will be forced to permanently close by the end of 2021 if the current lockdown is extended, research claims.
A survey by Nucleus Commercial Finance has revealed that a further 25 per cent will continue to operate but without making a profit.
The alternative lender highlighted that the longer lockdown lasts, the more businesses will have to shut.
If lockdown continues beyond 8 March until the end of April, 33 per cent of businesses will be forced to close, Nucleus warned.
This increases to 37 per cent if the lockdown continues until the end of May, and to 42 per cent if it goes on until the end of the summer.
Half of larger firms – those with 50-249 employees – will have to permanently close if lockdown is extended until the end of May.
Almost a third (31 per cent) of UK SME owners believe the lockdown will last until at least the end of March, 22 per cent predict it to continue until the end of April, and 14 per cent think that it will go on until the end of May.
The research also forecasts that a lockdown extension will cause 22 per cent of SMEs to make a loss for the year, 11 per cent to reduce their offering, eight per cent to make redundancies, seven per cent to close some of their sites and six per cent to permanently close their business.
However, some SME owners think a lockdown extension will benefit their business.
One in five expects to continue to operate and deliver profit and a further six per cent believe a lockdown extension will have a positive impact on their business.
“With a third national lockdown underway, many SMEs have limited time they can survive without delivering more income,” said Chirag Shah, chief executive of Nucleus Commercial Finance.
“Despite the government support measures in place, businesses can’t continue operating under such uncertainty and with limited notice about changes to restrictions businesses need a clear road map out of the pandemic, so owners can plan and have clear visibility of the support available to them.
“With the government support schemes coming to an end next month, we are seeing businesses stockpile coronavirus business interruption loan scheme finance ahead of the deadline in order to provide them with financial flexibility and security for the weeks and months ahead.”
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