Half of medium-sized businesses on the brink as lockdown restrictions continue
Nearly half (49 per cent) of medium-sized businesses have warned they could cease trading in less than two months if coronavirus restrictions do not ease.
The national lockdown is taking a major toll on businesses, with many fearing the worst if the restrictions continue.
If the current national lockdown lasts until April, more than eight in 10 (82 per cent) medium-sized businesses have said they would be at serious risk, according to new research from BDO.
Medium-sized businesses across the UK generate £1.4trn in revenues each year, and provide one in four jobs, according to BDO’s analysis, making them a critical part of any post-pandemic recovery.
Mid-tier companies have borrowed an average of £8m per business as a direct result of the pandemic, with almost half (45 per cent) unsure they will ever be able to pay back their loans under the current funding arrangements.
Almost a third (31 per cent) said the government should extend repayment terms on Covid-19 loans.
According to Ed Dwan, partner and head of BDO in the North West, the government has had to walk “an incredibly difficult tightrope” because protecting the UK’s businesses and shielding the NHS throughout the course of the pandemic.
“It is critical that in the upcoming budget we see policies that help support mid-market businesses,” he added.
Businesses have not been shy about their plight during coronavirus. The British Chambers of Commerce told the government back in October that merely the threat of a circuit breaker lockdown meant the situation for businesses was “graver by the day”.
But if restrictions are loosened ahead of spring, medium-sized businesses feel much more optimistic about their longer-term prospects.
Some 87 per cent believe that they will be able to increase trade and return to pre-Covid-19 revenues within three years.
Similarly, in recognition of the efforts the Chancellor has made already to protect firms, 87 per cent are confident the government will provide enough support to businesses over the next 12 months.
On 22 February the government will announce a plan to bring the country out of lockdown, however it is unlikely there will be any changes to the rules on that date. The government has said its priority is to get children back to school on March 8 at the earliest.