One in 3 closed small firms fear they will never reopen, says new survey

One in three closed small firms fear they’ll never reopen amid widespread redundancy plans.

By David Nowell
Wednesday, 13th May 2020, 7:00 am
Small businesses are fearful for the future
Small businesses are fearful for the future

A new study from the Lancashire-headquartered FSB underscores the threat posed to millions of livelihoods by a sudden retraction of support for small firms in the weeks ahead.

FSB’s fresh survey of 5,471 small business owners finds that four in ten have been forced to close since the beginning of the coronavirus outbreak in the UK.

Of those that have closed, 35 per cent are not sure whether they will ever reopen again.

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For those small businesses paying a mortgage or lease on their premises, over a quarter have failed to make, or faced severe difficulties in making, rent or mortgage repayments as a result of the pandemic’s economic impacts.

A similar proportion have had to shelve product development plans. Among exporters, a fifth say they have had to either reduce or cancel international sales.

In response to the strain being placed on them, more than one in three small employers are considering, or have already made, redundancies.

Seven in ten small employers have furloughed staff to aid the survival of their business, illustrating the extent to which the Job Retention Scheme has protected the livelihoods of millions as economic activity has slumped.

FSB National Chairman Mike Cherry said: “The impact of the coronavirus pandemic has been felt right across the small business community, with thousands of small firms all over the UK fearing for their futures.

“The Government has stepped-up with a huge range of support for millions of small businesses and sole traders.

“Policymakers now need to realise that the economy will not go from zero to a hundred overnight once we’re into the recovery phase.

The crucial support that’s on offer needs to be kept under review.”

The survey also found that close to one in ten business owners have applied for universal credit, with close to a third having their applications rejected.

Others were "falling between the cracks" and not eligible for grants..