COVID-19: Only half of businesses prepared to return to pre-crisis levels after lockdown
Only half of businesses prepared to return to pre-crisis levels after lockdown lifts, a new study reveals.
In a questionnaire by the Institute of Directors (IoD), one in six business leaders confirmed they would be able to operate at less than half of their pre-lockdown levels.
The survey also found that 6% of businesses think they will be totally unable to operate viably with social distancing in place. Only 49% said they could return to pre-lockdown levels, the IoD found.
The news comes as an increasingly stressful time for business owners, just this week Chancellor, Rishi Sunak announced plans to wind down the furlough scheme by July, leaving many business owners pressurised to go back to ‘business as usual.’
The furlough scheme was originally announced back in March when national lockdown laws were first implemented. The aim of the programme was for the Government to pay 80% of staff wages to prohibit companies from making unnecessary redundancies.
Since the launch of the scheme, the HMRC said 6.3m people had been temporarily laid off by 800,000 companies.
The chancellor is expected to announce that the Coronavirus Job Retention Scheme will be steadily scaled back as restrictions on business activity is lifted.
“It is great to see that the Government’s latest financial announcement for small businesses, the Bounce Back Loan Scheme, secured more than 69,000 small businesses with loans worth in excess of £2bn in the first 24 hours of the scheme’s launch,” says Rob Straathof, CEO of small business finance group, Liberis.
He continues…
“I do hope they will continue to unlock the much-needed working capital in days, so we can save as many small business owners from a slow but certain cash crunch if the economy doesn’t gradually recover.
“That said, for many restaurants and bars, it might already be too little too late.
“That’s because retail and hospitality small business owners need to take into account that the options, Bounce Back Loans or the Coronavirus Business Interruption Loan Scheme, are mutually exclusive. It’s no good helping small businesses bridge the crisis, only for them to not have enough working capital to restart and successfully run their business.
“I urge the chancellor and HMT to make at least part of the Bounce Back Loan in the form of a grant to help small businesses pay the rent and other fixed bills without creating a large debt liability, or we face a lot of pub and restaurant owners not opening up their doors at a time when we as a society are going to need them most.”
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