Real economy faces critical challenge over next 12 weeks, says accountants Kreston Reeves
A survey of 221 small and medium sized businesses in Kent, Sussex and London indicates that the next 12 weeks will be critical to the survival of many:
- 28% have seen their turnover reduced by over 70% since the lockdown
- 39% have seen their turnover reduced by over 50%
- 33% have less than eight weeks cash in the bank
- 56% have less than 12 weeks cash in the bank
- A majority (63%) have used the Government’s Job Retention (furlough) Scheme of whom 85% regard it as critical to their ability to keep staff on.
The survey was carried out by accountants, business and financial advisers Kreston Reeves as part of the Association of Practicing Accountants (APA), a network of 15 accountancy firms providing support to over 14,000 businesses across the UK.
The survey also found that just 20% of businesses have applied for funding under the Government Coronavirus Business Interruption Loan Scheme with 84% reporting that the scheme needed to work better.
Commenting on the survey Andrew Tate, Partner and Head of Restructuring at Kreston Reeves said:
“These figures underpin just how grave the situation is for many owner-managed businesses across the UK right now. Given how challenging the next few weeks are likely to be Government needs to direct the right resource where it is most needed. Our research suggests that furloughing has been critical for the survival of many businesses and their staff and is working well. However, there remain real challenges with the various Government backed loan schemes on offer with many of our clients reporting confusion over assessment criteria or unacceptable delays from participating lenders.”
The research was carried out between 14 and 30 April.