Small businesses have been left in financial ruin due to the pandemic, with one in 12 unsure they will ultimately survive, according to new research.
The data from Santander found that 21 per cent of small businesses expect they may collapse before any changes in restrictions kick in.
Those who will survive, do not expect to to recover to pre-pandemic levels until the summer of next year.
Small businesses operated by people with an ethnic minority background were also disproportionately impacted by the pandemic, researchers found, with 47 per cent experiencing a fall in business activity.
The findings pull the future of the high street into more uncertainty, as 29 per cent plan to leave city centre’s this year.
“With the growth of remote working, small businesses across the country will be at the forefront of our economic revival, but 2021 will be a crunch year for many, with a lot riding on a successful vaccine rollout,” said head of business banking at Santander UK, Susan Davies.
The UK’s vaccination programme provides a slither of optimism for some, but businesses in northern parts of the UK are set to see disproportionately low profits by March.
The data revealed that Covid-19 will likely widen regional disparity, with London firms forecasting a profits dip of 3.8 per cent as opposed to the East Midlands predicting a drop of 11.6 per cent.
Davies added: “While there is no ‘silver bullet’ solution, extensions to VAT deferrals, the furlough scheme and business rates relief could provide businesses with additional breathing space.
“We have been working tirelessly to support small business owners throughout the pandemic – from online workshops, ecommerce training and mental health support – and we will continue to help them find solutions to the huge challenges they are currently facing,” she concluded.