On Wednesday The British Chambers of Commerce (BCC) announced its results for week 6 of its Coronavirus Business Impact Tracker which showed most firms would be ready to resume working operations within 3 weeks.
In this week’s survey firms were asked to state how quickly they believe they would be able to re-start their businesses when required. Nearly two thirds of those surveyed whose businesses employ ten or less people stated they would need less than one week to resume operations, compared with 50% of businesses who employ over 50 people.
68% of business-to-business service firms said that they would need less than one week or no notice to restart operations, compared to 50% of business-to-consumer service firms.
Key outcomes from week 6
- 74% of firms have furloughed a proportion of their staff
- 59% of firms have submitted a claim under the Coronavirus Job Retention Scheme
- 54% of firms have three months cash flow in reserve or less
- 4% of firms said they have no cash in reserve
Business Interruption Loans:
- 61% of firms did not intend to apply for one of these loans
- 22% of firms attempted access CBILS
- 21% of firms have successfully accessed business support grants
- 11% of firms have successfully access HMRC’s expanded Time to pay initiative
The key message from businesses who took part in the survey is clear, most are able to re-open workplaces within a very short period of time. This will become crucial in the future when lockdown measures are eased and the government begin to encourage businesses to re-open.
Last week The Bank of England warned of a recession worse than any other in recorded history with the UK economy on course to shrink by nearly 14% this year based on an assumption that lockdown measures will be relaxed in the coming months. Despite this harrowing predication The Bank does predict a sharp economic bounce-back by the middle of next year. Both The Bank of England and The Office for National Statistics expect ‘no lasting damage from the pandemic’ in the long term which should give businesses some confidence moving forward.
It is estimated that around 6.3 million peoples wages are currently being paid either partially or in full by the government under The Coronavirus Job Retention Scheme. The latest figures collected by The BCC show 74% of firms surveyed had furloughed some or all of their staff. In Shropshire our survey reported that 77% had furloughed staff, however if restrictions are eased and firms are encouraged to re-open it is likely we will see these figures decrease significantly.
Also, we found that 80% of businesses surveyed in Shropshire felt confident that their business will be able to operate moving forward due to the Job Retention Scheme. The BCC network have called for the furlough programme to be extended if necessary for those businesses who may be unable to re-start once the lockdown is eased and if social distancing measures remain in place for a significant amount of time.
Maintaining cash flow reserves continues to be a worry for businesses during this crisis with 4% of firms surveyed stating they had no cash reserves left and 54% having 3 months or less in reserve. Therefore, it is vital that government financial support schemes reach firms faster to ensure their survival. In our latest survey we found that 58% of our members who were surveyed in Shropshire had between 3-6 months cash reserves.
Moreover, our members also signalled to us in our survey that following the current crisis greater support for managing cash flow and assistance in moving their business capacity online will be vital in maintaining their businesses.
Access to government loans are improving week-on-week with substantial increases in the amount of applications being approved and with money finally reaching businesses accounts. Last Monday saw the launch of the Bounce Back Loan scheme which enables SME’s to apply for loans of up to £50,000 which are 100% backed by government. More than 69,000 of these loans worth over £2bn were approved during the first 24 hours of the scheme going live.
Last week, UK Finance announced that lenders had now paid out over £5.5bn to SME’s through the CBILS. Almost £1.4bn worth of loans were provided in the week from 29 April to 6 May as lending under the scheme continues to grow. The number of approved loans grew by a third over the same period, increasing by 8,550 to 33,812. This news has been welcomed by The BCC network, however the alarming amount of firms who have stated that they have less than 3 months cash in reserves is cause for great concern with BCC Head of Economics commenting that the pace of delivery has been ‘disappointingly slow’.