43 per cent of small- and medium-sized enterprises (SMEs) received a state-backed loan during the Covid-19 crisis but a similar proportion believe the government could have done more to support businesses, research has shown.
European fintech SME lender CapitalBox also found that two in three (65 per cent) UK SMEs benefited from the furlough scheme and one in three (36 per cent) received tax relief.
However, 42 per cent of respondents said that the government could have done more, as not all businesses received help via these channels.
CapitalBox commissioned Opinium to survey 1,250 SME leaders across seven European countries, including the UK, in November 2020.
CapitalBox said many SMEs were forced to take out loans as the furlough scheme did not cover them in its first three months of the scheme being announced in March 2020. The survey showed that 56 per cent of UK SMEs had to take out a loan during the pandemic, with 36 per cent using the funding to pay for overheads and 20 per cent to pay wages.
Loans taken out by UK small businesses to cover workforce costs rose from one per cent in March 2020 to 14 per cent in April last year.
In March 2021, 35 per cent of SMEs used loans for buying equipment, 19 per cent for working capital and 17 per cent for remodelling and expansion.
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“Government schemes, financial aid, and tax relief have proved to be the saving grace for many businesses, sectors, and the wider UK economy in the past year,” said Scott Donnelly, board of director at CapitalBox.
“But as these financial schemes end and businesses affected by lockdown delays can restart trading, governments must make sure though that SMEs have access to immediate cash to avoid a gap that could damage their business – whether that is through loan schemes or working with alternative lenders, is essential.”