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31.9% of struggling small businesses in the North East will not survive the Coronavirus crisis

New research has revealed that 31.9% of struggling small businesses in the North East do not believe their business will survive the Coronavirus crisis. This compares to 30% across the UK.

Additionally, the research which has been conducted with 1,400 small businesses across the UK shows that 80% of businesses who feel they are at risk of failing are encountering problems in getting help from the banks.

The research, which has been undertaken by Robson Laidler Accountants, with offices in Jesmond and Durham, together with other members of the UK200Group, asked small businesses across the UK to share information about how their business was faring before the lockdown and what has happened since.

92% of the businesses surveyed felt their business was either trading ‘as expected’ or ‘better than expected’ before the crisis. Since the lockdown 40% of these businesses have closed, either by the government or due to falling trade.

But the biggest underlying concern for many is the inability to access funds.

Many participating in the survey recognise that the banks are doing their best, but they are stretched and are struggling due to a combination of lack of clarity on the new schemes from the government, increased demand and reduced resources due to the lockdown.

One respondent, an optician commented; “After nearly 2 weeks, the bank has not called me back and even though I’ve gone back to them, the response is they have my details, but they are exceptionally busy and will get back to me ASAP.”

The issue is compounded due to grants to cover furloughed staff costs not yet being available and thus the pressure on the cashflow for these small businesses is being stretched to breaking point.

Commenting Graham Purvis MD at Robson Laidler said: “Our concern is that these small businesses will simply run out of cash and that will result in many very good small businesses failing. Yet this is avoidable as there are grants and schemes that have been made available, but they are not easily accessible or understood. We are working with clients to support them in packaging their applications and then presenting them to the banks to ensure they have the best chance of a quick and positive response and thus can get the money they need to survive.

“We urge all small business owners to ask their accountants and business advisers to help them with their grant and loan applications. Aside from being able to support you with your applications, they can also clearly explain the different options and schemes available and can advise businesses on the best course of action.”

This was posted in Bdaily's Members' News section by Robson Laidler .