Almost half of UK firms could run out of money within six months
According to an article by Credit Connect figures from the Office for National Statistics (ONS) have revealed that almost half of UK businesses are concerned that they will run out of cash in less than six months. The survey of over 5,000 firms found that a quarter (24%) said they were unsure about their level of reserves. Some 4% reported having no reserves at all, with VAT deferrals, business rates holidays and state-backed loan schemes from the Treasury proving insufficient to prop up every business.
44% of businesses who responded they had not permanently ceased trading between 20 April and 3 May, reported that their cash reserves would last less than 6 months. 91% of businesses who had paused trading had applied for the Coronavirus Job Retention Scheme, compared to 72% of businesses who were still trading.
Of businesses whose financial performance was outside normal expectations and continued to trade internationally during the coronavirus pandemic, 72% of exporting businesses reported they were exporting less than normal, while 59% of importing businesses were importing less than normal
The ONS said 76% of firms had signed up for the Treasury’s wage subsidy scheme – up from 66% two weeks ago. Of those firms still trading, 72% said they were taking advantage of wage subsidies, rising to 91% for those that were closed.
After wage subsidies, the VAT payment deferral scheme was the second most popular support measure, with 59% taking the government up on its offer.
Head of Strategy and Engagement at ONS Hugh Stickland said: “It is interesting to see the growth in community spirit over the weeks ONS has carried out this survey. Now for the first time, we’ve asked people about their attitudes and expectations of a post-pandemic nation. In many cases, this is optimistic, especially among older people.”
Lewis Shand Smith, Chairman of the Business Banking Resolution Service said “These statistics demonstrate why it has never been more important for British businesses to get fair treatment from their banks. The Government’s loans have been a lifeline to many businesses. However, we recognise that unfortunately, the sheer volume of loans – and the economic crunch ahead – are, taken together, likely to result in higher demand for our service.
We appreciate that these are unprecedented times and the on going outbreak of Covid-19 could affect us all. If this impacts your financial circumstances in any way please let us know as there will be ways we can help.
Source: Credit Connect