Tuesday 28 April 2020 9:22 am

Small businesses are the heart of the nation - and they need real support

Save our SMEs
Managing Director, Sage

Dialogue is key during a crisis; it helps us to make the right decision by understanding the problems and challenges we face. That’s why I have been speaking to our customers every day, businesses like Danish Camp, a riverside visitor centre based in Bedford and Wheely Tots a local charity in North London. These conversations are entirely unique, the challenges they face are wide ranging, yet there is commonality in what these companies up and down the country require – that is our collective support, and now.

Our research shows that this week alone, over 70% of SMEs are having to adapt in response to the coronavirus outbreak, with more than half witnessing a “significant” decrease in demand for their products. Moreover, these companies are estimating a drop of up to 20% in annual revenue – a statistic signalling the impact the coronavirus pandemic could have on our economy.

The UK’s 6 million SMEs need big business to help them, they need the immediate government relief packages to be effective and delivered quickly, and they need the community to support their business in whichever way they can.

As the payroll software provider to half of the UK’s businesses, I am only too aware that every click-through on our tool to support those applying for the Coronavirus Job Retention Scheme (JRS), is an individual not just responsible for their own livelihoods and family, but for many others too.

Read more: City A.M.’s #SaveOurSMEs campaign

Be in no doubt, the introduction of the JRS scheme is a vital lifeline – not just for our high streets and town centres today, but in the months and years to come. Why? Because these businesses need this cash to keep afloat – be it for rent, staff costs or stock – and they need it now.

Insights from our research of 500 small and medium sized businesses across the UK, highlights 70% of companies believe this outbreak will not be contained until at least October 2020. This is in the same week that we saw potential return to work policies discussed, and swiftly rejected by the government – with the UK’s Chief Medical Officer proposing that social distancing would likely have to last until the end of the year.

Today, businesses are telling us that the much-needed measures currently in place do not serve this time frame. We must listen, support and action the following:

  1. Access to government support must be strengthened – from loans to furlough

Our research finds that 56% of companies believe the government is giving their business the right level of support, but to extrapolate to the UK landscape, that means 3 million are not. We know that almost 3 in 10 are relying on access to the furlough scheme, in order to maintain their current staffing level.

This week, around only half of applications to the Coronavirus Business Interruption Loan Scheme (CBILS), equating up to £2.8bn, made by firms who require this access to cash in order to survive the pandemic have resulted in lending. 

The banks, along with various fintech companies are rapidly working through their backlog – but we must find a quicker and easier route to enable a faster process. The new no-questions-asked loan scheme announced yesterday looks promising on this front: but the devil as ever will be in the detail. 

  1. The most effective tool used to combat the impact on business, is communication – we need to keep listening to business

Businesses large and small rely on regular communication to help them navigate times of change. That’s why we’ve made available insights and webinars to all businesses, along with setting up a Taskforce with the CBI, and other major suppliers to the nation’s SMEs. If a third of SMEs believe social distancing should be eased in 6-12 weeks’ time, we must listen, share knowledge and support how they can operate in this new, and unfamiliar customer facing world.

  1. Support is required for long term change and adaption

The true impact of the coronavirus on UK business will not be known for some time, but I believe SMEs have proven their resilience and ability to adapt to change and uncertainty. It is widely accepted that businesses will not return ‘to normal’ soon – and so we must listen and work with them to make the changes they need to survive. For example, we know that around 70% of businesses are already planning a staggered return to work if restrictions are eased, and over half (54%) will limit physical interactions in the office. Encouragingly, over 60% of companies said they were confident to continue trading after this outbreak, an aspiration I hope, that will be delivered – as we will all feel the benefits in the years to come. 

The Chancellor was right to extend the Job Retention Scheme to June, and to constantly review the best way to deliver emergency loans. But must remember that SMEs are not a homogenous group, and that each sector, business, and therefore challenge is entirely unique. For now, we must make sure that the much-needed cash, to pay for the most significant cost to any business, its people, is successfully transacted to those who need it.

Going forward, we must work together to prepare for an uncertain future by pooling lessons learnt and supporting out the local businesses, now or after the end of lockdown, as they are the heart of the nation.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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