Small Businesses

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A new survey of smaller firms throughout the UK suggests that thousands of them will find it impossible to repay the COVID-19 loans they have received via government schemes.

LawBite commissioned this online survey, which spoke to 511 owners of small and medium-sized enterprises (SMEs). The results appear to show that up to 59% made use of either the furlough scheme to pay employee wages or one of the government loan schemes. This adds up to approximately 3.5 million small businesses, and the survey indicates that a minimum of one tenth will find it impossible to pay back the money.

According to the survey, the main reasons why this is the case are damage to their supply chains and a lack of cash flow caused by the pandemic. Accountants in Goole or elsewhere that are experienced at dealing with small business issues like cash flow problems may be able to help find solutions to this.

Roughly 40% of the SME owners that took part in the survey said that insufficient cash flow is currently preventing them from investing in their products or new tech to improve their businesses. Furthermore, around one quarter said that trying to repay Covid-19 loans has left them unable to pay suppliers on time.

LawBite Founder Clive Rich said that a combination of repayments and the end of the furlough scheme was costing small businesses a lot of money. He also pointed out that these cash flow and supply chain worries were being exacerbated by other factors, such as Brexit.

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