The SME Confidence Report by small business insurer Simply Business surveyed 3,700 such business owners across the UK, saying that the total cost of coronavirus to the sector will exceed £69 billion.
The firm found that in Scotland – where it noted that the private sector recorded one of the deepest slumps in business activity in the UK last month – the pandemic will cost SMEs £15,484 each on average in lost work, earnings and loan repayments. That is second only to London, at £17,074, while the national average came in at £11,779.
Furthermore, business confidence has been hardest-hit in Scotland and the North-west of England where 45 per cent say their business is at risk of closure. Simply Business said the figures come as the rganisation for Economic Co-operation and Development warned that the UK is likely to be the hardest hit by Covid-19 among major world economies, with the UK economy likely to fall by 11.5 per cent in 2020.
ONS figures released on Friday also showed the UK economy dropped a record 20.4 per cent in April, far exceeding the downturn during the 2008-09 financial crisis, Simply Business also said.
It added that across the UK, an estimated 234,000 SMEs have already shut, while two thirds have temporarily ceased trading. The largest rate of permanent closures has been in London, at 7 per cent, compared with the 4 per cent average across the rest of the country. Additionally, four in ten small business owners in Scotland say they do not feel supported by government.
Simply Business chief executive Alan Thomas said SMEs’ importance to the UK “can’t be overstated,” with the sector accounting for 99 per cent of all British businesses and generating more than £2 trillion in combined turnover. It is “essential for our economy that small business bounces back” but, with continued strict measures in place, “the challenge is far from over for most”, he added.
However, Simply Business also found that more than half of SMEs across the UK said they had been able to successfully apply for a government loan or grant, while three quarters plan to continue, or restart, their current business – and a tenth expect to start a new business.
Across all regions, 22 per cent report feeling optimistic about life after coronavirus. Thomas added: “With so many [small business owners] set to continue or restart their current business, and many others planning to open new small businesses, we expect confidence to continue to rise as we move through the stages of lockdown.”
Simply Business has also launched a free Financial Support Checker aimed at SMEs, landlords and the self-employed.
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